At Vestd we like to make your life easier and that's why we suggest setting your EMI option grant date the day before the end of the valuation window.
This means that all your EMI agreements issued under a single valuation will have the same date.
The benefit to you is when it comes to reporting the new EMI options to HMRC.
HMRC groups all EMI option agreements under the date they were granted, and if everything has the same date this process becomes dramatically simpler.
This doesn't affect the legality of the options as your users can accept them ahead of time.
If, however, you want to issue an EMI option that is agreed and granted immediately, rather than in a few weeks for example, then you can make that choice when setting up your scheme template.
The main reasons that you might want to do this are likely to be either:
- You're only granting EMI options to a few employees and can manually ensure they're accepted on the same day.
- There may be a business exit in the next 24-28 months, in which case you may want the grant date to be as soon as possible, to maximise the chance of your employees holding their EMI options for at least 24 months to qualify for Business Asset Disposal Relief at 10% rather than the standard Capital Gains Tax rate of 20%.
It's important to note that if you manually enter a grant date, the EMI option agreement cannot be accepted after said date as the agreement has expired and cannot be used. In this scenario, you would need to regrant the EMI under a new agreement with a grant date in the future.
Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal or financial advice'.