ETASSUM52060 - Enterprise Management Incentives (EMI): Qualifying companies: Gross assets requirements
Paragraph 12, Schedule 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA)
From 6 April 2026, the value of the company’s gross assets at the date of grant must not exceed:
- £120 million, or
- £30 million - where the employer company is a Specified Company
The limit for options granted prior to 6 April 2026, remains £30 million for all companies.
If the company is a member of a group of companies, the limits are applied to the gross assets of the group as a whole.
Valuing Gross Assets
HMRC Statement of Practice 2 (2006) outlines how to value the gross assets of a company. The value of the gross assets is taken from the balance sheet, provided that the figures are drawn up in accordance with normal UK accountancy practice. If a company uses IFRS then IFRS 16 will apply, from January 2019, in determining the amount of assets shown on the balance sheet.
Payments in respect of shares
HM Revenue and Customs will not regard the assets of a company immediately before the issue of the shares in question as including any advance payment received by the company in respect of that issue.
Where shares or securities are issued partly paid, the right to the unpaid portion will be regarded as an asset of the company. That asset will be taken into account for the purpose of deciding whether the relevant gross assets rule is satisfied, whether it is shown in the company's balance sheet or not.