10 November 2020

Brexit and availability of the Enterprise Management Incentive Scheme

The Enterprise Management Incentive scheme (EMI) allows for trading companies with less than £30 million of gross assets to grant share options to employees with a value of up to £250,000 in a three-year period.

Under the EMI there is no income tax or national insurance to pay by the employee if they exercise the option and the shares are bought for the market value they had on the date of grant of the option, even if current market value is significantly higher. Upon sale any gain in value in the shares is taxed at the lower Capital Gains Tax rates.

Due to the tax advantageous nature of the EMI, it arguably amounts to a form of State Aid, and so under EU requirements approval for it from the EU Commission is required.

In a move that will no doubt be of benefit to many businesses, the Government has recently confirmed that following the end of the Brexit transition period (midnight on 31 December 2020) the UK will continue to make the EMI available to qualifying small- and medium-sized enterprises.

Oliver Claridge is an Associate in the Corporate Tax team.


This note reflects our opinion and views as of 10 November 2020 and is a general summary of the legal position in England and Wales. It does not constitute legal advice.

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