ETASSUM54080 - Enterprise Management Incentives (EMI): Requirements relating to options: Changes to the grant of options from 6 April 2023

Part 5 of Schedule 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA)

Two changes to simplify the grant of options under EMI schemes apply to all EMI options granted on or after 6 April 2023.

The changes also apply to EMI options granted before 6 April 2023 but not yet exercised – further guidance on these options is at ETASSUM54090.

Restrictions on shares

The requirement for the company to set out details of any restrictions on the shares that can be acquired has been removed.

Employer companies are no longer required to detail within the share option agreement the details of any restrictions on the shares that can be acquired.

Working time declaration

The requirement for an employee who has acquired share options to sign a working time declaration has been removed.

Employer companies are no longer required to declare that an employee has signed a working time declaration when they have been issued with an EMI option, and are no longer required to retain the signed working declaration and provide the employee with a copy.

This amendment does not remove the working time requirement itself, only the requirement for the employee to sign a working time declaration. Employees are still only eligible for EMI options if they are required to spend:

· at least 25 hours each week (the 25 hours requirement), or

· if less, 75% of their working time (the 75% requirement),

working as an employee for the company whose shares are subject to the EMI option or for a qualifying subsidiary.