Income Tax (Earnings and Pensions) Act 2003 Schedule 5 paragraph 6

Maximum value of options in respect of relevant company's shares

Schedule 5 paragraph 6 sets a £250,000 cap on the total value of qualifying Enterprise Management Incentives (EMI) options that an individual employee can hold, and imposes a three-year restriction period once that cap is reached.

• An employee who has already been granted qualifying EMI options worth a total of £250,000 cannot receive any further qualifying options within a three-year restriction period running from the date the last qualifying option was granted.
• The restriction applies whether the options arose from employment with a single company or with two or more companies within the same corporate group.
• The restriction bites regardless of whether the earlier qualifying options have been exercised or released — the £250,000 ceiling is based on options granted, not options still outstanding.
• The value of shares for the purposes of testing against the £250,000 limit is determined using the same valuation rules set out in paragraph 5(6) to (8) of Schedule 5.