Material interest rules for CSOPs, EMI options and employee shareholder status

This practice note considers the requirement that participating employees and/or their associates must not have a material interest in the company whose shares are used for company share option plans (CSOPs) and enterprise management incentives (EMI) options. It includes the special rules relating to employee benefit trusts and other discretionary trusts.

This note also considers the requirement that a shareholder who had a material interest in a company or its parent undertaking did not qualify for the income tax and capital gains tax reliefs associated with employee shareholder status.

On 23 November 2016, the Chancellor of the Exchequer announced that the tax reliefs associated with employee shareholder status will not be available in relation to shares acquired in consideration of employee shareholder agreements made on or after 1 December 2016 (or, where independent advice was received on 23 November 2016 before 1.30 pm, 2 December 2016).

Practical Law Share Schemes & Incentives, based on material originally contributed by Sara Cohen, Lewis Silkin LLP


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