Budget 2013 Reaction and Analysis: EMI Schemes and Entrepreneur’s Relief


Buried in the small print of the Budget is a welcome improvement to the Employment Management Incentive (EMI) Scheme.  Employees who receive shares under EMI schemes will now be able to claim the 10% rate of capital gains tax if they have held the options for 12 months. Previously, they needed to hold the shares for 12 months. EMI schemes will become much more attractive as a result of this change.


The Chancellor has also confirmed the introduction of the Employee Owner scheme. In return for giving up certain employment rights such as redundancy, a new employee may be awarded shares in the company. The first £2,000 worth of shares will now be tax free. As before, the shares will be exempt from capital gains tax, within certain limits. The scheme is beset with practical difficulties and, as it currently stands, is likely to see very little take-up.