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EMI and ER

That bl00dy man in the pub again

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Client company has granted various EMI options over the years, some only very recently. Client has been "advised" (he won't say by whom) that if the employee has already held options for more than a year then the sale now of any shares acquired by exercise of an option granted only a few months ago will also qualify for ER. The legislation seems pretty clear to me - only those shares that have been "held" for more than a year will qualify. So if all options were to be exercised and sold today, for those on which options were granted less than a year ago ER will not be available. But have have I misunderstood the legislation?

As an aside, I note that HMRC's guidance (CG64052) apears to be wrong - it refers to matching EMI share disposals on a FILO basis whereas the legislation (TCGA s106A(6A)(b)) says that the EMI shares sold are identified with those acquired on an earlier date rather than a later date, ie FIFO.

Question edited - thanks to response below.


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14th Jan 2019 10:52

I agree that TCGA 1992 s169I(7A) means that the specific shares being sold must have been under option for at least 12 months. Perhaps the confusion has arisen in relation to the rules for non EMI shares where shares recently acquired will qualify provided at least 5% have been held for 12 months.
On your second point where does the legislation say that FIFO must be used?

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