Income Tax (Earnings and Pensions) Act 2003 Schedule 5 paragraph 1

Enterprise management incentives: qualifying options

Schedule 5 paragraph 1 sets out what constitutes a qualifying option for the purposes of the Enterprise Management Incentives (EMI) code and lists the requirements that must be satisfied.

• A qualifying option is a share option that meets all the requirements of Schedule 5 at the time it is granted and is notified to HMRC in accordance with Part 7
• The company whose shares are under option must be a qualifying company, and the option holder must be an eligible employee of that company (or of a group member if the company is a parent)
• The option must be granted by reason of the employee's employment, and must satisfy general requirements in Part 2 and further requirements in Part 5 covering option terms, eligible share types and other matters
• The phrase "the appropriate time" in the EMI code means the time when the option is granted