EMI Share Options

For Founders, By Founders

Overview and benefits

Enterprise Management Incentive Share Option Schemes are great for SMEs, high-growth and founder-led businesses, as they help companies attract and retain key employees when they don’t necessarily have the cash flow required to pay salaries or cash bonuses at a competitive market rate.

• EMI schemes are beneficial to employees as they enable to employees to avoid income tax and National Insurance contributions that would otherwise be applicable to the market value of shares or options granted.

• If the shares are allocated through an EMI scheme, employees only face a 10% capital gains tax (which could be offset by the employee’s annual Capital Gains Tax exemption) on the increase in value over the option price provided that price is at or above the market value of the shares as previously agreed with HMRC.

• Your company can however, set the option price below the agreed market value, in which case income tax will be payable but only on the discount.

• From a business perspective, the costs of establishing an EMI scheme will be deductible against corporation tax.

• We also advise on other option schemes, and can discuss this with you too.

Our Expertise

• Ignition Financial is offering a fully-integrated service, together with our sister firm Ignition Law, helping your business establish an EMI scheme from start to finish.

• Our lawyers and accountants advise on the best structure and conditions for options which will match shareholders’ goals and enable your company to retain and reward key employees, helping your business thrive.

• Then we will take care of all the technicalities (both legal and accountancy) simultaneously.

• With an integrated team, we can begin promptly, with minimum disturbance to your company and team, via a cloud-based and efficient process, so that you can have a comprehensive EMI scheme in operation within an efficient time frame.

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