The announcement makes EMI an even more attractive means to recruit and retain key employees. Any business that currently has employees holding their maximum individual limit should be able to grant each employee a further £130,000 worth of options.
In addition, entrepreneurs' relief will be extended to gains on shares acquired through the exercise of EMI options. Entrepreneurs' relief is a special rate of capital gains tax of 10% for lifetime gains of up to £10m per person, subject to various qualifying conditions. While we await further details of this announcement, it will make EMI options even more tax efficient, and provide another reason why businesses should make full use of this type of incentive arrangement.
If you would like further details of these changes, or on how to implement an EMI option plan, please contact me.