HMRC revamp guidance on EMI independence test

HMRC have added new guidance to their Employee Tax Advantages Share Scheme User Manual (ETASSUM) in respect of the Enterprise Management Incentives scheme independence requirement covering the meaning of ‘control’ and how to apply the independence requirement in group structures involving partnerships including limited partnerships and LLPs.

Detailed new guidance has been included around what HMRC consider would constitute ‘arrangements’ by virtue of which independence could be lost for the purposes of this requirement including in respect of mutual understandings regarding a sale and distress provisions.

HMRC covered this point in the October 2024 edition of their Employment Related Securities Bulletin which includes links to the updated ETASSUM pages and also to updated guidance on the implications of the Supreme Court decision in Vermilion Holdings Ltd [2023] UKSC 37 (where the Court held that a securities option was deemed to have been granted by reason...