UK Budget - Change to Employee Share Schemes

    March 2012
    Major changes were announced in the Budget today to the Enterprise Management Inventive Scheme, targeted at small- and medium-sized companies. The limit on the value of shares that can be held under option by an employee will be increased, from £120,000 to £250,000, from a date to be announced. More importantly, where EMI options are exercised after 5 April 2012 the sale of the shares will qualify for the 10 percent capital gains tax rate through entrepreneurs' relief (although the detail of how this will work has yet to be announced). These changes suggest that EMI options will retain their very attractive tax status when the government publishes its reaction to the recommendations of the Office of Tax Simplification (OTS).

    The government has said that it will shortly be issuing a consultation on the OTS recommendations to change the UK tax-advantaged share plan regime (covering CSOPs, SAYE, SIPs and EMI schemes). We will issue more information on this consultation when it is announced. A summary of the OTS's recommendations can be found in our full pdf.