Giving key staff shares
Thinking of giving a key person a stake? See the tax they'd pay three ways: a gift now, EMI options or an ordinary option.
Your answer
Enter the share value now and at a sale, the number of shares and your employee's salary.
About this calculator
For a UK company thinking of giving one employee shares, for the 2026 to 2027 tax year.
We assume the options are used when the company is sold, and the shares sold straight away.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
A gift of shares is taxed as pay on their value now: income tax, plus National Insurance if they can be readily sold. The growth after that is taxed as a gain when they're sold.
EMI options (Enterprise Management Incentives) have no income tax or National Insurance if the option price is at least the value when granted. The growth is taxed as a gain, at 18% with Business Asset Disposal Relief once 2 years have passed since the grant. Each employee can have up to £250,000 of EMI options.
An ordinary option is taxed as pay on the whole gain when it's used. In each case the company can deduct the shares' value, less what the employee paid, from its profits (CTA 2009 Part 12).
Worked example
EMI options mean the least tax for your employee: £35,460 in all.
50,000 shares · option price £1 a share · sold in 3 years · salary £60,000 · 2026/27 rates throughout · company profits up to £50,000
| 50,000 shares: worth £50,000 now, £250,000 when sold | |
|---|---|
| 1. Gift the shares now | |
| Taxed as pay now: their value, £50,000. Income tax | £22,000 |
| No National Insurance: the shares can't be readily sold | £0 |
| On the sale, Capital Gains Tax on the growth (£200,000), after the £3,000 tax-free allowance | £47,280 |
| Your employee keeps | £180,720 |
| 2. EMI options | |
| Nothing to pay when the options are granted | £0 |
| Option price at least the value now: no income tax or NI when the options are used | £0 |
| Capital Gains Tax on the £200,000 gain, at 18% with Business Asset Disposal Relief (granted 2+ years before the sale) | £35,460 |
| Your employee pays £50,000 for the shares and keeps | £164,540 |
| 3. An ordinary option (outside EMI) | |
| Taxed as pay when used: the gain of £200,000. Income tax and NI through payroll | £95,771 |
| Your employee pays £50,000 for the shares and keeps | £104,229 |
| Company's tax deduction (EMI options): £200,000, saving at 19% | £38,000 |
Worked out using the 2026/27 income tax, National Insurance and Capital Gains Tax rates, and the EMI limits from 6 April 2026.
Questions people ask
Do we need a valuation for EMI?
In practice, yes. The option price is usually set at the market value when granted, and you can ask HMRC to agree that value before you grant. Without it, HMRC can later say the price was too low and tax the difference as pay.
What changed for EMI in April 2026?
From 6 April 2026 the company limits went up: gross assets of £120m or less (was £30m), fewer than 500 full-time staff (was 250), and £6m of options in all (was £3m). Options can now be used up to 15 years after grant. The £250,000 limit per employee hasn't changed.
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