EU State Aid Approval Lapse For EMI Share Option Schemes

EU State Aid Approval Lapse For The UK’s EMI Share Option Scheme

On 6th April 2018 EU State Aid approval for the UK’s popular tax efficient EMI share option scheme for employees expired. In 2015/16 alone, £380m of EMI share options were granted to employees.

However, the government has already applied for fresh approval and are awaiting the Commission’s final response. There is no reason or cause for concern to suggest that approval won’t be granted again, but until it is some companies and advisers are exercising caution and delaying the grant of employee share options intended to qualify as EMI share options until fresh EU State Aid approval has been given.

Companies considering implementing an EMI share option scheme in the interim need to be aware that employees may not be eligible for the tax advantages presently afforded to option holders and such share options run the risk of being treated as non-tax advantaged employment-related securities options (i.e. subject to income tax and NICs on exercise).

As EU State aid policy evolves over time, there is also a chance that any new approval may impose new or amended requirements for EMI options granted under the expected new approval.

The government says it is trying to ensure this lapse period is as short as possible.

If a company needs to grant employee share options after 6 April 2018, and before fresh EU state aid approval has been received, the terms of the option scheme documentation implemented should be carefully drafted so that if necessary the parties may cancel and re-grant such options at a time when they will qualify for the tax reliefs associated with EMI.

If Brexit does go ahead then the UK may of course choose to ignore such EU State Aid rules and the UK government would be free to design future option arrangements in any way it wanted to.

About Jonathan Lea

Jonathan is a specialist business law solicitor who has been practising for over 18 years, starting at the top international City firms before then spending some time at a couple of smaller practices. In 2013 he started working on a self-employed basis as a consultant solicitor, while in 2019 The Jonathan Lea Network became a SRA regulated law firm itself after Jonathan got tired of spending all day referring clients and work to other law firms.

The Jonathan Lea Network is now a full service firm of solicitors that employs senior and junior solicitors, trainee solicitors, paralegals and administration staff who all work from a modern open plan office in Haywards Heath. This close-knit retained team is enhanced by a trusted network of specialist consultant solicitors who work remotely and, where relevant, combine seamlessly with the central team.

If you'd like a competitive quote for any legal work please first send an email to with an introduction and an overview of the issues you’d like our help with, following which someone will liaise to fix a mutually convenient time for a no cost no obligation initial 20 minute call with one of our fee earners.

We are always keen to take on new work and ensure that clients will not only come back to us again, but also recommend us to others too.

Get In Touch

Contact Us

In need of legal advice? We would love to hear from you!