Income Tax (Earnings and Pensions) Act 2003 Schedule 5 paragraph 9

The independence requirement

Section 9 sets out the independence requirement that a company must satisfy for the purposes of an Enterprise Management Incentives (EMI) share option scheme, ensuring the company is not controlled by or subsidiary to another company.

• The company must not be a 51% subsidiary of another company
• The company must not be under the control of another company (or another company together with any connected person) without being its 51% subsidiary
• No arrangements must exist that could cause the company to become such a subsidiary or fall under such control, though arrangements for a qualifying exchange of shares are excluded
• A company subject to an employee-ownership trust is treated as meeting the independence requirement regardless of the above conditions