Do I need to declare tax/NI after exercising my EMI share options?

Hello, My question is regarding my tax/NI liabilities for EMI share options. - I received EMI share options from my previous company. - When I left the company, I exercised those shares. - The shares are still held in my name; I have not yet sold/disposed of the shares. - When I exercised the shares, I transferred the amount required to the company via a bank transfer. - In my Notice of Exercise, there is the following clause: “I accept a liability to income tax (including primary/secondary) National Insurance Contributions should the exercise price be below the Actual Market Value of the Option Share on the Date of Grant.” - The Finance Manager at my previous company told me the following: “As the EMI shares will be issued at less than their market value when granted £0.01 (today £0.00001 due to share subdivision) vs market value of £30.98436245 (today £0.03098436245) you will be need to declare the gain on your tax return and potentially pay an element of tax on the difference between these two figures depending on your personal tax position”. I'm trying to understand if I need to declare anything and if so, how?

Hi,

You will not have to pay Income Tax or National Insurance if you buy the shares for at least the market value they had when you were granted the option.  

If you were given a discount on the market value, you’ll have to pay Income Tax or National Insurance on the difference between what you pay and what the shares were worth. You may have to pay Capital Gains Tax if you sell the shares. 

Tax when you sell shares

Thank you.

Please forgive my ignorance, but I'm trying to understand whether I was "given a discount on the market value". Does my last bullet point confirm that this is true? And if yes, how do I "pay Income Tax or National Insurance on the difference between what you pay and what the shares were worth"?

Hi,

If you invest in deeply discounted securities, put the difference between what you paid for the bond and what you redeem or sell it for in box 3 of SA101 (page Ai1).  

Additional information (2023)

Additional information notes

Thank you.

Are shares in a company considered deeply discounted securities?

Hi J,
No, please refer to:
SAIM3010 - Deeply discounted securities: introduction
Thank you.