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EMI Share Options Calculator 2024/25

Enterprise Management Incentives (EMI) are the UK's most tax-efficient employee share option scheme. No income tax or NIC on grant or exercise (when granted at market value). CGT only on sale — with BADR reducing the rate to 10% on up to £1M of lifetime gains. Limit: £250,000 per employee, £3M company-wide.

EMI Options Calculator

Enterprise Management Incentives — 2024/25. No income tax on grant/exercise (at market value). CGT only on sale.

Total share options being modelled

The price the employee pays to buy each share

HMRC-agreed market value at the time of grant — ideally pre-agreed with HMRC Shares and Assets Valuation

The price per share you expect to receive when you sell

Used to estimate employee NIC rate on any discount element

Business Asset Disposal Relief: employee held options 2+ years, exercised 12+ months before sale, company qualifying trading company for 2 years

On sale

Capital gain on sale£40,000.00
CGT (10% (BADR))£3,700.00
Total tax (EMI)£3,700.00
Net profit after tax (EMI)£36,300.00

Comparison: Unapproved options

Income tax (unapproved)£0.00
NIC (unapproved)£0.00
CGT (unapproved)£8,880.00
Total tax (unapproved)£8,880.00
Net profit (unapproved)£31,120.00
Tax saving from EMI£5,180.00

Annual CGT exempt amount (2024/25): £3,000. Estimate only — actual tax depends on all sources of income and gains in the tax year. Consult a tax adviser before granting or exercising options.

5 EMI Planning Tips

  1. Get HMRC advance assurance: Before granting options, apply for HMRC advance assurance to confirm your company and trade qualify. It takes around 25 working days and avoids nasty surprises. Notify HMRC of the grant within 92 days using the ERS online service.
  2. Agree share value with HMRC first: Use HMRC Shares and Assets Valuation (HMRC SAV) to agree a market value before grant. This fixes the CGT base and prevents disputes on exit. Unrestricted market value (UMV) is typically used unless shares carry restrictions.
  3. Check company eligibility: The company must have gross assets of £30M or less and fewer than 250 FTE employees. It must be an independent trading company — subsidiaries and certain sectors (financial services, property, law, health) do not qualify.
  4. Options must be exercised within 10 years: EMI options lapse if not exercised within 10 years of the grant date. A disqualifying event (e.g. the company becoming a subsidiary) also triggers a 90-day window to exercise before EMI status is lost.
  5. Plan for BADR: Ensure the employee holds options for 2+ years and exercises at least 12 months before any exit. Structure the deal so the BADR clock starts at grant, not exercise. BADR reduces CGT to 10% on the first £1M of lifetime qualifying gains — potentially saving £140,000.

How EMI Tax Works

EMI options are granted at or above the agreed HMRC market value. Employees pay no income tax and no NIC when they exercise their options. The CGT clock starts at grant — so holding options for 2+ years before selling (and exercising 12+ months before sale) qualifies for BADR. Compare this to unapproved options where the full gain at exercise is subject to PAYE income tax and NIC — a significant difference.

Key EMI Conditions

  • Company:Independent trading company, gross assets ≤ £30M, < 250 FTE employees
  • Employee: Must work ≥ 25 hrs/week or ≥ 75% of working time for the company
  • Options: Must be exercised within 10 years; notify HMRC within 92 days of grant
  • BADR: Hold options 2+ years; exercise 12+ months before sale