Enterprise Management Incentive (EMI) Scheme

The Enterprise Management Incentive (SMI) share option scheme is a Government approved, tax beneficial way of rewarding and motivating employees.  This share option scheme gives employees the right to a company’s shares in the future at today’s approved fixed price. 

Employees do not have to pay the income tax usually due on the market value of any shares or options granted to them. Under an approved EMI, employees are only charged capital gains tax at 10% on the increase in value over what they pay for the shares. As long as that price is at or above the market valuation of the shares on the date of granting the options.

The benefits of implementing an EMI scheme mean that employees are incentivised with ownership of the company as well as no income tax or NI when EMI options are granted, prospect of rewarding capital return and employees will only be liable for Capital Gains Tax (CGT) when the shares are sold.