EMI options can be granted by independent trading companies whose gross assets do not exceed £30m. Options can be granted over shares with an unrestricted market value at the date of grant (up to £250k). There will normally be no income tax or National Insurance contributions when the options are exercised.

HMRC has published new guidance aimed at assisting smaller companies in the preparation of their own EMI valuations. Four illustrations are provided of what might be acceptable to HMRC when agreeing EMI valuations. These are:

  • a start-up company
  • an established trading company
  • a company with an imminent Alternative Investment Market floatation
  • a company in talks about a sale

Whilst the guidance is expressed as being specifically for share valuation for EMI purposes the guidance may be of interest to those conducting valuations for tax purposes in general.

See section 2.2 of HMRC:Valuation of Assets