Income Tax (Earnings and Pensions) Act 2003 section Schedule 5 paragraph 35

Type of shares that may be acquired

Section Schedule 5 paragraph 35 sets out the requirements that shares acquired under an enterprise management incentives (EMI) option must meet regarding share type and status.

• Shares acquired under an EMI option must form part of the ordinary share capital of the relevant company.
• The shares must be fully paid up, meaning there can be no outstanding undertaking to pay cash to the company at a future date.
• The shares must not be redeemable, and this restriction extends to shares that may become redeemable at any point in the future.
• These requirements ensure that EMI options relate only to straightforward, permanent equity interests in the company.