A qualifying EMI scheme needs conditions to be met by the company, the employee, the option agreement and the relevant shares. The conditions must continue to be met throughout the period the scheme is live. The reward for this diligence lies in the preferential capital, rather than income tax, treatment that a partaking employee can enjoy when his shares are sold at a gain. Commercial, as well as tax, factors should be considered by the company when the option agreement is drafted. Individual performance, length of employment or company trading targets could each be measures to trigger the granting of options.
