EMI Options – EU Approval Expires Tomorrow – Urgent Action May Be Required

Yesterday (4th April) HM Revenue & Customs (HMRC) issued a statement confirming that existing EU state aid approval for UK EMI Option Schemes will expire on 6 April 2018 – tomorrow - and to date no new approval has been obtained.

Although the Government is working hard to gain EU approval the outcome is still uncertain. 

The HMRC statement confirms that HMRC considers that the EU approval applies to the granting of share options and therefore that share options granted up to and including 6 April 2018 won’t be affected by this lapse of the approval. However, EMI share options granted in the period from 7 April 2018 until EU State aid approval is received may not be eligible for the tax advantages presently afforded to option holders. 

What you should do
• If you are currently in the process of granting EMI Options and can accelerate this process so that the options are granted before midnight on 6 April 2018 you might want to consider doing so.
• Don’t forget that although it is best practice to agree EMI valuations with HMRC before grant these can be agreed retrospectively.
• If you are not in a position to grant EMI options before midnight tomorrow then it may be best not to grant any additional options until the position becomes clearer. 

How we can help 
Our business tax team are on standby today to answer any questions you have. Call your usual contact or alternatively call 01865 861166 and ask to speak to myself  or Mike Shearan.