Tax situation unclear re Share Options.24 Jun 2026 10:50
See bottom line.
In the UK, the taxation process typically involves the following stages:1. When you get the options (Grant Date)You usually do not pay tax when the company first offers you the share options.2. When you buy the shares (Exercise Date)When you use your options to buy shares, this is called "exercising" the option. At this point, you generally must pay Income Tax and National Insurance on the difference between what you paid for the shares (the strike price) and what they are actually worth at that time.3. When you sell the shares (Sale Date)When you sell the shares later, you may have to pay Capital Gains Tax (CGT) if the shares have increased in value since you bought them.Tax-Advantaged SchemesDirectors can pay much less tax if their company uses specific government-approved schemes:Enterprise Management Incentives (EMI): Available for qualifying smaller companies. If you meet the rules, you usually pay no Income Tax or National Insurance when you exercise the options.Company Share Option Plan (CSOP): Allows up to \(\pounds60,000\) in shares. If you hold the options for at least three years, you do not pay Income Tax or National Insurance when you exercise them.