A Fly in the EMI Ointment

Hector was an egg sat upon a wall

Trying to E-M-I he had a great fall

None of the Queen's horses would restore him to his place

Because all the Queen's men had egg on their face.

Like other specialists in employee share schemes I have for a number of months been considering with interest the provisions of what is now Schedule 14 to the Finance Act 2000. These confer tax reliefs in respect of so-called 'enterprise management incentives' commonly known as EMI share options. Briefly stated in optimum circumstances the reliefs give exemption from income tax and (if otherwise applicable) employers' National Insurance contributions in respect of the unrealised gain arising upon the exercise of the option; and for capital gains tax taper relief purposes the shares are treated as having been acquired when the option...