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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Enterprise Management Incentives (EMI): Taxation of EMI options: Tax advantages of EMI options

There is no income tax or National Insurance contributions charged on the grant of a qualifying EMI option.

If an EMI option is exercised within ten years of the date of grant and there has been no disqualifying event, there will be no income tax or National Insurance contributions due, provided that the employee buys the shares at a price at least equal to the market value they had on the day the option was granted. If the option is a replacement option, it must be exercised within ten years of grant of the original option in order to qualify for tax relief (Section 530 ITEPA).