Jurisdiction(s):
United Kingdom

Key definition

Options definition

What does Options mean? In legal practice, an option is a contractual right, not an obligation, to buy (a call) or sell (a put) an identified underlying (for example shares, commodities or currency) at an agreed strike price either on the expiry date (European-style) or at any time up to expiry (American-style). The holder pays an option premium for this right; key terms include the underlying and quantity, strike, expiry and the settlement method (physical delivery or cash settlement). Options are used to hedge risk, obtain price protection or leverage exposure, and are fundamental in derivatives, corporate finance and remuneration structures. The term is...

UK Enterprise Management Incentive (EMI) share options: qualifying conditions, limits, HMRC self-certification and tax reliefs for corporate lawyers

Published by a LexisNexis Corporate expert

Practice notes

This Practice Note outlines the qualifying conditions for granting Enterprise Management Incentive (EMI) Options and summarises the associated tax advantages.

Brought in by the Finance Act 2000, EMI options are designed to help smaller, higher-risk companies attract and keep employees of high calibre by offering meaningful tax reliefs to staff in companies that meet the qualifying conditions in Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).

From 6 April 2014, companies have had to register their EMI Plans online and self-certify compliance with the statutory requirements (see Self-certification of EMI options below).

This Practice Note provides a concise overview for corporate lawyers; where more detail is needed, advice should be taken from a share incentives specialist.

The form and purpose of EMI options

EMI options are a form of share option over a company's Shares (the EMI Company)...

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Graham Muir

CMS

Graham Muir is a partner in CMS tax team with a 25-year track record of specialism in employee incentive scheme and employment tax issues.Graham advises quoted and unquoted companies on structuring, establishing and operating all forms of employee incentive scheme. He advises on the employer and employee tax, company law, corporate governance and regulatory issues arising out of such schemes (whether share based or cash based).Graham was a founder member of the HMRC Employment-related Securities Forum, is a member of the Consulting Tax Editorial Committee of LexisNexis and is Co-Chair of the Tax Committee of the Share Plan Lawyers group....

Web page updated on 22/05/2026

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