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EMI Anniversaries
The much-publicised release of remastered Beatles albums reminds us of the glorious past of EMI the record company. But it also reminds us of the imminent arrival next year of an important anniversary of EMI the tax scheme.
How so?
Well, one of the characteristics of the tax-favoured treatment which is afforded to options which meet the criteria of the Enterprise Management Incentive scheme is that it is available only in respect of options which are exercised within ten years of the date on which they are granted (or, in the case of "replacement options", within ten years of the date the original option was granted). Later exercise is treated under the generally less favourable non-approved rules. Note that it is not a requirement of EMI that an option must lapse after ten years: it is simply that any exercise after the ten-year anniversary will not benefit from the reliefs.
The EMI scheme was introduced in 2000. It is therefore more than possible that there are now in existence unexercised EMI options which will soon be ten years old. Despite the recession it is possible that some of those options may be "in the money" (i.e. that the strike price is less than the current share value). The point of this note is to remind readers that if the hoped-for tax benefits are to be secured, exercise must take place before the crucial ten-year anniversary.
If you need more "Help!" on EMI options and need to contact someone, "Let It Be" Stephen Deutsch at stephen.deutsch@bkltax.co.uk, phone 0208 922 9119. We Can Work It Out.
