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| The good news: publication by HMRC of its EMI Evaluation Report, 'Use
of EMI and its Perceived Impact' which gave the scheme, in general
terms, a clean bill of health. |
| This will make it much harder for the government to further cut the
scope and benefits of EMI, a move rumoured to be under consideration
some months ago because of the mounting tax relief bill. |
| The bad news: the realisation that one of the keystones of the EMI
scheme, the ten percent Capital Gains Tax taper relief band, is about to
disappear in a few weeks time. This will reduce the appeal of the EMI
scheme considerably, since the effective rate of CGT payable by
risk-takers in such companies will go up by 80 percent - from ten to 18
percent. It remains to be seen how many EMI option-holders will be able
to cash in their options and sell the shares before the new 18 percent
flat CGT rate bites from April 6. |
| The report is based on the results of two quantitative surveys carried
out by researchers IPSOS-MORI among around 925 employers and 1,189
employees who have been granted EMI options. It is disappointing that
the researchers were not able to ask of a wide range of companies which,
whilst prima facie eligible, had not reported the grant of EMI options,
why they have not made use of it. The report's findings suggested that
practitioners, as well as HMRC and others, were not doing nearly enough
to promote the benefits of EMI. |
| Read the full report: Use of EMI and its Perceived Impact |
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