EMI Scheme
The Enterprise Management Incentive (EMI) scheme is one of the UK's most attractive employee share option arrangements, designed to help growing businesses attract, retain, and motivate key staff. It offers significant tax advantages to both employers and employees, while aligning team performance with the long-term success of the company.
What are the benefits?
Significant Tax Savings for Employees
Under an EMI scheme, employees can exercise options over shares at the agreed exercise price without paying Income Tax or NIC at exercise, provided the options were granted at or above market value. On sale of the shares, CGT is payable at the 10% BADR rate — a considerable saving versus income rates of up to 45%.
Corporation Tax Deduction for the Company
When EMI options are exercised, the company can claim a Corporation Tax deduction for the gain — making EMI one of the few incentive schemes that benefits both the employee and the employer simultaneously.
Flexibility in Design
EMI options can be granted with performance conditions, vesting schedules, and exit-only rights — giving you full control over when and how employees become shareholders. This flexibility makes EMI suitable for a wide range of business models and growth strategies.
Alignment of Interests
By giving key employees a stake in the company's future value, EMI aligns management interests with those of the founders, driving performance and significantly improving retention of high-value team members.
How can Zenus Tax help?
We assess whether your company and employees qualify for the EMI scheme
We obtain an advance valuation agreement from HMRC to agree the market value of the shares
We draft the option agreements and ensure the scheme is correctly registered with HMRC
We advise employees on the tax treatment of their options at grant, exercise, and sale
Frequently Asked Questions
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