Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

National Insurance Contributions definition

What does National Insurance Contributions mean? National Insurance contributions (NICs) are payments made by employees, employers and the self-employed to HMRC—or credited—so individuals build entitlement to the UK State Pension and other contributory social security benefits. NICs are a statutory concept defined primarily in the Social Security Contributions and Benefits Act 1992 (and the Northern Ireland 1992 Act) and related regulations. NICs are distinct from income tax but are usually calculated and reported via PAYE or self assessment. Amounts collected are paid into the National Insurance fund (Great Britain) or the Northern Ireland National Insurance Fund and finance the new State Pension, contributory Employment and Support...

EMI options: UK tax summary table—income tax, NICs, Apprenticeship Levy, CGT and BADR; timing of grant/exercise/disposal, disqualifying events, and market value versus discounted options

Published by a LexisNexis Share Incentives expert

Practice notes

Given the intricate rules that govern business asset disposal relief (BADR) and the regime that sets the tax treatment of enterprise management incentives (EMI) options, and the way these frameworks interact, the point at which an EMI option is exercised and the exercised shares are then sold is pivotal in establishing whether the full relief for the EMI option and BADR will be obtainable to a taxpayer.

A table below outlines the income tax, national insurance contributions (NICs) and Apprenticeship Levy (AL) position for EMI options at grant and at exercise, and the capital gains tax (CGT) plus BADR outcome on the disposal of shares acquired through exercising EMI options, varying according to when the option is exercised and when the shares are sold.

For the purposes of this table, the following assumptions have been made:

the share options were issued after 6 April 2013 and are qualifying EMI options, exercised on or after 6 April 2026 within the 15-year period from the date of grant (or within the ten-year period from grant for options granted by certain Northern Ireland companies) in each applicable case
the shares are disposed of after 6 April 2019
the company is...

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Web page updated on 21/05/2026

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