ETASSUM54040 | Enterprise Management Incentives (EMI): Requirements relating to options: Grant of option by deed

Paragraph 37, Schedule 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA)

The option may be granted under deed or seal if a company so wishes. In this case a separate written agreement to the terms of the option will need to be signed by the option holder. This document must state the conditions set out in ETASSUM54030.

If an option is granted by deed, the date of grant of the option is the date on which the deed is executed. The option is not a qualifying EMI option, however, until the agreement has been signed. An electronic signature is acceptable although provisions must be made to ensure employees are able to retain copies of the deed and acceptance. A company can, for its own administrative purposes, get its employees to sign agreements in advance of the deed being executed, but the options will not be legally granted until the deed has been executed.