EMI Stock Options Calculator 2026/27

Calculate your tax on EMI, CSOP and unapproved share options. See your net proceeds after income tax and CGT using 2026/27 UK rates.

Net Proceeds After All Tax
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Gross Gain
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Income Tax Due
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CGT Due
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Total Tax
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Exercise Cost
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Effective Tax Rate
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Tax Breakdown
How Share Option Tax Works

EMI options are the most tax-efficient employee share scheme. No income tax at grant or exercise (provided options were granted at or above market value). The gain from exercise price to sale price is taxed as CGT. If the options have been held for at least 2 years from grant and the company still qualifies, Business Asset Disposal Relief (BADR) applies at just 14%.

CSOP options give similar treatment if held for 3 years from grant and within the £60,000 option limit. CGT applies at standard rates (18% basic / 24% higher or additional) on the gain above the £3,000 annual exempt amount.

Unapproved options trigger income tax plus employee National Insurance on the spread (market value minus exercise price) at exercise. Any further gain between exercise and sale is subject to CGT. Employer NI at 15% can sometimes be transferred to the employee via a joint election.

The CGT annual exempt amount for 2026/27 is £3,000. BADR applies at 14% for qualifying EMI disposals.

Share Scheme Comparison · 2026/27

Tax treatment at exercise and disposal for each scheme type

Scheme Income Tax at Exercise CGT Rate Holding Period Limit
EMI (qualifying)None14% BADR2 yrs from grant£250,000 per employee
EMI (non-qualifying)None18% / 24%Any£250,000 per employee
CSOP (qualifying)None18% / 24%3 yrs from grant£60,000 at grant value
CSOP (early exercise)20% / 40% / 45%18% / 24%Under 3 yrs£60,000 at grant value
Unapproved20% / 40% / 45%18% / 24%AnyNo statutory limit

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EMI Stock Options FAQs

What makes an EMI option a qualifying disposal?
A qualifying EMI disposal means you hold shares for at least 2 years from the date the options were granted (not exercised), and the company still meets EMI qualifying conditions at the point of sale. If both conditions are met, Business Asset Disposal Relief (BADR) applies at 14% CGT on the full gain above the £3,000 annual exempt amount · rather than the standard 18% or 24% rate.
What is the difference between CSOP and EMI for employees?
EMI offers more generous treatment: no income tax at exercise (if granted at market value), potential BADR at 14%, and no statutory limit per employee beyond the £250,000 individual cap. CSOP is available to a wider range of companies (including those above EMI size limits) but has a £60,000 option limit at grant value and requires a 3-year holding period to avoid income tax at exercise. For most startup employees EMI is the better scheme.
What is a Section 431 election for unapproved options?
A Section 431 election is a joint election between employer and employee made within 14 days of exercising options over restricted securities. It means you pay income tax on the full unrestricted market value at exercise, but then any future growth is taxed as CGT rather than income. Without the election, if restrictions lift later you could face further income tax charges at that point. The election is most valuable when the company is expected to grow significantly after exercise.
When should I exercise EMI options to qualify for BADR?
For EMI, BADR is measured from the grant date, not the exercise date. You can exercise any time after 2 years from grant and still qualify for BADR at 14%, provided you sell within a reasonable period and the company conditions are met. There is no need to hold the shares for 2 years after exercise. Always take advice before exercising, as early exercise may trigger other tax obligations or affect the qualifying status.
Do I need to report share options on my tax return?
Yes. Any taxable event from share options must be reported on a Self Assessment tax return. For EMI and CSOP with no income tax at exercise, you still report the disposal when you sell shares and declare any CGT due. For unapproved options, income tax at exercise is normally collected via PAYE by your employer · and also declared on your return. HMRC also requires the company to submit an Employment Related Securities (ERS) annual return by 6 July each year.

For informational purposes only · Not financial or tax advice · Tax rates shown are for 2026/27 · BADR rate 14% applies for 2026/27 · Always seek professional advice before exercising options