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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

From
HM Revenue & Customs
Updated
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Enterprise Management Incentives (EMI): Taxation of EMI options: Corporation Tax

The employing company gets a corporation tax (CT) deduction if qualifying shares are acquired by employees upon the exercise of an EMI option. The CT deduction matches the difference between the market value when the shares are acquired and the amount that the employee pays for them. Where the option is to acquire shares at their market value at the time of the grant of the option, the CT deduction is equal to the amount that would have been chargeable to tax but for the EMI relief. Where EMI options were granted at a discount, CT relief is given for both the amount of the discount and the amount that would have been charged to tax but for the EMI relief.