Changes to sharesave schemes - FT.com Entrepreneurs who took advantage of Enterprise Management Incentive (EMI) schemes were among the beneficiaries of the rule changes on employee share plans announced in this week's finance bill. They will now be allowed to receive options over shares in the company that employed them. Some rules for EMI schemes were liberalised in the March 2012 Budget, but David Cohen, a partner at solicitors Norton Rose, said that the relaxation had failed to take account of the way options are granted and then exercised. Typically, executives in a private company do not turn options held under EMI schemes into shares until immediately before the company is sold. But under the March relaxation, entrepreneurs could qualify for the 10 per cent rate of capital gains tax relief only if they had owned the shares outright for at least 12 months prior to exercise. Otherwise, gains were taxed at 28 per cent. The finance bill will expand the requirement for a minimum 12-month holding period to include the date from which the options were granted, not the date from which they were converted into shares. "Coupled with the increase in the individual limit from £120,000 to £250,000 which took effect in June, EMI options are now by far the most tax-effective arrangements for rewarding UK executives," Cohen said. There were also changes to Save as You Earn arrangements. Previously, an employee who owned shares in a company that was acquired by another would have been liable for income tax and National Insurance contributions - rather than capital gains tax - on any gains made if the shares had been held for under three years. That has been changed. The government is also pushing ahead with the "rights-for-shares" scheme, under which workers who agree to give up their usual labour rights - say, those relating to unfair dismissal or protection against discrimination - will be able to crystallise grants of £2,000 to £50,000 of shares in their employer's company free from capital gains tax. However, employers" groups warned that aside from all the difficulties inherent in valuing shares in an unquoted company, the plans would be unlikely to persuade workers to give up their rights. The independent Office for Budget Responsibility has warned that over time, the scheme may turn into one huge loophole for top executives. Norton Rose's Cohen said that those taking advantage of the scheme would most likely be senior executives with less to lose from relinquishing employment rights. "These are not going to be guys who are worried about protecting their maternity leave," he said.