Why the valuation matters
EMI is the most tax-efficient way for a qualifying UK company to grant share options. If the exercise price is at least the market value of the shares at grant, there is generally no income tax or National Insurance when the option is exercised, and the growth is taxed as a capital gain when the shares are sold.
That treatment depends on getting the grant-date value right. HMRC will agree a valuation in advance, and an agreed valuation removes the risk of a later challenge to the exercise price.
What we deliver
- A valuation report concluding on both Actual Market Value (AMV) and Unrestricted Market Value (UMV) for the class of shares under option.
- The supporting analysis HMRC expects to see: recent transactions in the company's shares, financial performance and forecasts, the rights attached to each share class, and appropriate discounts for a minority holding.
- Preparation of the VAL231 submission to HMRC's Shares and Assets Valuation team, and help responding to their queries.
- Analysis of growth share and hurdle structures where the option is over a separate share class.
- Refresh valuations for later grant rounds.
EMI limits at a glance
| Condition | Limit from 6 April 2026 | Before |
|---|---|---|
| Employees | Fewer than 500 full-time equivalents | Fewer than 250 |
| Gross assets | No more than £120 million | £30 million |
| Company-wide options | £6 million of shares under unexercised EMI options | £3 million |
| Per employee | £250,000 of unexercised options | Unchanged |
| Exercise period | Within 15 years of grant | 10 years |
Both value limits are tested using UMV at the date of grant, which is one reason the valuation needs to conclude on both figures. Our guide to AMV vs UMV explains how each is used.
Built for technology and life science companies
Pre-revenue companies, IP-heavy balance sheets, and multiple rounds of preferred investment make EMI valuations harder to support. We work exclusively with technology and life science companies, so the analysis reflects how these businesses are actually funded and valued, and how ordinary shares sit behind preferred shares in the capital structure.
US employees too?
An EMI valuation agreed with HMRC does not satisfy US rules. If you also grant to US taxpayers you will need a 409A valuation, and the two should be consistent. See our cross-border service and our guide to EMI vs 409A valuations.
Frequently asked questions
Do we have to agree an EMI valuation with HMRC?
No, it is optional. But agreeing the valuation with HMRC before you grant gives certainty that the exercise price is not below market value and that the EMI limits are respected, which is why most companies do it.
How long is an agreed EMI valuation valid?
HMRC states that EMI valuations are valid for 90 days from the date of the agreement. Options need to be granted within that window, and nothing should change in the meantime that would affect the value.
What is the difference between AMV and UMV?
Actual Market Value takes account of the restrictions attached to the shares, and is the benchmark for the exercise price. Unrestricted Market Value ignores those restrictions and is used to test the £250,000 individual limit and the company-wide limit.
Can a pre-revenue company agree an EMI valuation?
Yes. HMRC considers valuations for companies at every stage. For pre-revenue technology and life science companies the valuation typically rests on recent funding rounds, the rights of the share classes involved, and the development stage of the business.
How often do we need a new EMI valuation?
Whenever you plan a new round of grants after the 90-day window has closed, and sooner if there has been a material change such as a funding round or an offer for the company.
This page is general information, not tax or legal advice. It reflects US and UK rules as we understand them in October 2026; confirm how they apply to your company with your advisers.