{"id":26339,"date":"2021-11-04T09:52:07","date_gmt":"2021-11-04T09:52:07","guid":{"rendered":"https:\/\/www.outsourcedacc.co.uk\/?p=26339"},"modified":"2021-11-04T09:52:07","modified_gmt":"2021-11-04T09:52:07","slug":"enterprise-management-incentives-emis","status":"publish","type":"post","link":"https:\/\/www.outsourcedacc.co.uk\/blog\/enterprise-management-incentives-emis\/","title":{"rendered":"Enterprise Management Incentives (EMI\u2019s)"},"content":{"rendered":"
A share option is the right to buy a certain number of shares at a fixed price, some period in the future, within a company.<\/p>\n
Employees can generally exercise their share options – i.e., buy the shares – after a specified period, known as the vesting period. You can make the granting and exercising of share options dependent on reaching certain targets, such as specific sales targets.<\/p>\n
When an employee exercises their share options, it’s at the price fixed at the date of grant, i.e., when the options were given to the employee, regardless of the prevailing market price. They can then keep the shares or, if the market price is higher, sell them at a profit.<\/p>\n
By ensuring the share option is an EMI the employee will not have to pay income tax or national insurance when they buy the share\/ exercise the option if it\u2019s not below market value.<\/p>\n
To qualify as a company.<\/p>\n
To qualify as an employee.<\/p>\n
<\/p>\n
You must also ensure the share option meets certain criteria and conditions.<\/p>\n
How do I get approval from HMRC?<\/p>\n
To ensure your scheme falls under EMI, the company can obtain prior clearance from HMRC. Its also necessary to notify HMRC 92 days from the date of the grant. This is an online form that can be completed using your Government gateway ID.<\/p>\n
In addition to the EMI scheme, you also may consider some of the below schemes that might benefit you if EMI\u2019s doesn\u2019t apply.<\/p>\n
Share Incentive Plans known as SIP<\/p>\n
Employees receiving shares under a SIP will not pay any income tax or national insurance if they hold on to the shares for 5 years. You will also not pay any capital gains if you keep them in the plan until you sell them. If you take them out of the plan, keep them and sell later you might have to pay capital gains taxes if their value has increased<\/p>\n
There are different ways to get shares under SIP. Employees can get up to \u00a3 3600 of free shares in any tax year. You can also buy shares up \u00a3 1800 or 10% of your income tax-free, your employer can also give you up to 2 free matching shares for each share you buy. You may also be able to buy more shares with the dividend you get from the shares you buy or receive.<\/p>\n
<\/p>\n
Save as you Earn (SAYE)<\/p>\n
This is a savings-related share scheme where you can buy shares with your savings for a fixed price.<\/p>\n
You can save up to \u00a3500 a month under the scheme. At the end of your savings contract (3 or 5 years), you can use the savings to buy shares.<\/p>\n
The tax advantages are:<\/p>\n
Company Share option plan<\/p>\n
This gives you the option to buy up to \u00a330,000 worth of shares at a fixed price.<\/p>\n
You will not pay Income Tax or National Insurance contributions on the difference between what you pay for the shares and what they\u2019re worth.<\/p>\n
Transferring your shares to an ISA<\/p>\n
You can transfer up to \u00a320,000 of employee shares into stock and shares Individual Savings Account (ISA) if you have shares in a:<\/p>\n
You will not have to pay Capital Gains Tax on any gains you make on your shares if you move them to an ISA.<\/p>\n
You must transfer your shares to your ISA within 90 days of when you took out your SIP or SAYE shares.<\/p>\n
If you have any questions and would like to introduce any of the above schemes give us a ring. We would be happy to help you answer any questions or deal with HMRC to obtain any clearance required<\/p>\n","protected":false},"excerpt":{"rendered":"
A share option is the right to buy a certain number of shares at a fixed price, some period in the future, within a company. Employees can generally exercise their share options – i.e., buy the shares – after a specified period, known as the vesting period. You can make the granting and exercising of […]<\/p>\n","protected":false},"author":12312400,"featured_media":26340,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[19,495,494],"tags":[76,62],"_links":{"self":[{"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/posts\/26339"}],"collection":[{"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/users\/12312400"}],"replies":[{"embeddable":true,"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/comments?post=26339"}],"version-history":[{"count":1,"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/posts\/26339\/revisions"}],"predecessor-version":[{"id":26341,"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/posts\/26339\/revisions\/26341"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/media\/26340"}],"wp:attachment":[{"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/media?parent=26339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/categories?post=26339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.outsourcedacc.co.uk\/wp-json\/wp\/v2\/tags?post=26339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}