NI due on exercise of employee share options, not HRMC approved, unlisted?

jamesd

Are employee and/or employer NI due on exercise of employee share options in a scheme that is not HMRC approved, where the company is currently not listed on any exchange? I assume that this means no market for the shares, which I think means neither employee nor employer NI is due on the difference between grant and exercise fair market value, just tax?

The company concerned is planning an IPO (with all that implies about location) at some point but is not currently listed on any stock market, just privately held with venture capital participation.

sharnad

Yes Im pretty sure NI is due on both if it is an unapproved scheme

jamesd

Thanks. What prompted me to wonder was "All the gains on a non-statutory option are taxed as income and may also be subject to national insurance contributions" (my bold). That "may" word is interesting, since if not payable it's a significant incentive to exercise options before IPO.

jamesd

On further reading of that document, it appears that there may be no NI to pay if there's no cash buyer and no open market for the shares.