Top Tax Tips for Owner Managed Businesses – Tip 2 – EMI Share Options

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Tax Planning

Top Tax Tips for Owner Managed Businesses
2. EMI Share Option Arrangement
Enterprise Management Incentive (EMI) share option schemes are a tax efficient way in which to retain and recruit key employees by offering them the opportunity to acquire a stake in their employing company.
The terms of the option are personalised to the company’s specific circumstances and may include performance requirements and / or time constraints that must be met before the employees can acquire the shares.  The employees’ acquisition of shares is very tax efficient for them.
The advantages to the business owner are that staff incentivisation will not cost the business cash, as a bonus would. Also, if the company’s value increases they may be able to withdraw money from the business at a rate of tax that is effectively less than 10%