EMI share options may lose tax advantages from 7 April 2018

HMRC has announced that EMI share options granted from 7 April 2018 may not be eligible for the tax advantages currently available to option holders.  

What are the reasons for tax advantages in EMI schemes not being granted?

• Tax advantages are dependent on EU State Aid approval which expires on 6 April 2018. The government has been seeking fresh approval from the European Commission but has not received  a final response. It is not now expecting to receive this before 6 April.  
• As a result, EMI share options granted from 7 April 2018 until such time as EU State Aid approval is received may not qualify for tax advantages. Companies may therefore wish to hold off granting EMI options from 7 April 2018 until the position has been clarified.

HMRC considers that the current State Aid approval applies to the granting of share options, so share options granted up to and including 6 April 2018 should not be affected by this lapse of the approval.  Whilst there is no certainty that options granted by 6 April will not be affected, companies who have implemented EMI Plans this year may want to finalise any outstanding options they had been intending to grant by the 6 April deadline.