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Enterprise management incentive replacement options

Transferring the benefit

Key points

  • Tax advantages of enterprise management incentive (EMI) options include relaxations to business asset disposal relief conditions.
  • There are disqualifying events that may trigger an income tax charge if the options are not exercised within a specified time.
  • In share exchanges the acquiring company must obtain all the shares of the EMI company for the replacement options provisions to be available.
  • If the acquiring company decides to offer replacement options these must be granted within six months of the acquiring company obtaining control.
  • It is likely that the number of shares in issue in the acquiring company will differ from the original company so the value of both companies must be considered.

Enterprise management incentive (EMI) options are the most popular tax advantaged share option scheme available to private limited companies and for good reason.

They allow the company to reward and incentivise its employees with...

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