Increase confirmed in individual limit for Enterprise Management Incentives

29th May 2012

Following our earlier news items looking at the proposed changes regarding Enterprise Management Incentives, we are pleased to report further developments.

The Government has announced that the proposed increase in the individual limit for EMI options from £120,000 to £250,000 will be brought into effect on 16 June 2012. This means that, on or after 16 June 2012, EMI options can be granted over shares with an aggregate market value at the date of grant of £250,000. For example, an employee currently holding EMI options over shares with a value at grant of £100,000 will be eligible to be granted further EMI options over shares with a value at grant of up to £150,000.

There is, however, no further news as yet on the status of the proposal to extend entrepreneurs’ relief to shares acquired on the exercise of EMI options, and to relax the 5% shareholding limit. We shall let you know once we have clarification of the position regarding this proposal.

If you or your clients would like to discuss any of these issues please contact:

Robert Postlethwaite rmp@postlethwaiteco.com

David Reuben dgr@postlethwaiteco.com

Stephen Chater spc@postlethwaiteco.com

Judith Harris jdh@postlethwaiteco.com