EMI share options – a new transparency obligation

Regulations* come into effect today, 11th July 2018, which give effect to a government commitment to add the tax reliefs and exemptions for which EMI share options qualify to the list of tax advantages in relation to which HMRC is authorised, by s 180(2) Finance Act 2016, to collect and publish information about EU State Aid received by beneficiaries in accordance with existing EU obligations. The commitment was made by HM Treasury as part of the process for securing a renewal of EU state aid approval on 15th May 2018 – at least until Brexit (see earlier post).

The EU’s commitment to publish information on companies which receive State Aid relates only to State Aid in excess of €500,000

The commitment is to publish information on companies that receive aid in excess of €500,000 and details of this, and of the information expected to be provided is to be found here:


The information to be published by the EU includes, for example, the name of the business, its region and trade sector.

Neither s180 FA 2016 or the Regulations refer to a threshold limit of any amount, but it is understood that HMRC would not seek to exercise its powers to require disclosure of information on state aid insofar as there is no corresponding obligation to the EU to do so.  The amount of the state aid associated with EMI options would appear to be, broadly, the difference, as at the time of grant, between the value of an EMI option, and the value of an ‘unapproved’ option which would be expected to deliver a similar quantum of benefit net of tax. This is clearly less than the amount of the cost to HM Treasury of the tax saving to the individual, which is not itself a form of proscribed state aid. It is understood that HMRC is developing modelling tools for quantifying the amount of state aid associated with the grant of EMI share options. At present, it would appear that only a small number of companies would be beneficiaries of state aid in excess of the EU’s €500,000 threshold. For the vast majority of companies whose employees are granted EMI options this additional obligation to disclose information about the company should therefore be of no concern.

At the time of posting, we are awaiting an HMRC Bulletin giving further information as to how HMRC intends to give practical effect to the government’s transparency obligation.


*The Enterprise Management Incentives Exemptions and Reliefs (Amendment of Tax Advantages in Schedule 24 to the Finance Act 2016) Regulations, SI 2018/737

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