SolvedETASSUM57010 | Enterprise Management Incentives (EMI): Taxation of EMI options: Tax advantages of EMI options
From HM Revenue & Customs · Employee Tax Advantaged Share Scheme User Manual
Section 530 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA)
There is no income tax or National Insurance contributions charged on the grant of a qualifying EMI option.
From 6 April 2026, if an EMI option is exercised within:
15 years, or
10 years - where the employer company is a Specified Company
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 10/15 years of grant of the original option in order to qualify for tax relief.
The 10 year limit remains for all companies where the option is exercised prior to 6 April 2026.