Why there are two numbers at all
Shares in a private company are not worth what a simple share of the company’s value would suggest. A minority holding cannot control anything, cannot force a dividend, has no market to sell into, and is usually subject to transfer restrictions in the articles requiring it to be offered to everyone else first.
Tax law recognises this by valuing the same share two ways. Unrestricted market value asks what the share would fetch if none of those restrictions existed. Actual market value asks what it is really worth with them attached. AMV is always the lower of the two, sometimes substantially.
Neither is the right answer on its own. Each does a specific job in an EMI scheme, and using one where the other belongs is the standard mistake.
What actual market value controls
AMV sets the exercise price - the amount your employee pays per share when they exercise.
Set the exercise price at or above AMV and there is no income tax charge on exercise. The employee simply buys the shares, and everything from there is a capital gain. That single fact is the reason EMI schemes are worth the trouble, and it rests entirely on getting AMV right.
You may deliberately grant at a discount to AMV, which makes the options cheaper to exercise and more meaningful to someone who cannot fund the full price. The scheme still qualifies. What changes is the tax: a charge arises on exercise on the discount, and the automatic section 431 treatment falls away.
What unrestricted market value controls
UMV does not touch the price anybody pays. It is a measuring stick for the limits.
An individual may hold up to £250,000 of unexercised EMI options over a three-year period, and the company as a whole up to £6 million. Both are measured at unrestricted market value at the date of grant. Because UMV is the higher number, the limits bite sooner than founders working from the exercise price expect.
The company limit rose from £3 million on 6 April 2026, alongside the increases in the gross assets and employee tests, so a scheme designed against the old ceiling has considerably more room than it did.
Agreeing it with HMRC
You are not required to agree your valuation with HMRC. You should anyway, and almost everyone does.
The submission sets out the company, its financial position, the share class, the restrictions, and your proposed AMV and UMV with the reasoning behind them. HMRC’s Shares and Assets Valuation team either agrees or comes back. What you get at the end is certainty - if HMRC later disputes the exercise price, you are holding a letter saying they agreed it.
Two practical points. The agreement is valid for 90 days from the date of the letter, provided nothing material changes in the company in the meantime, so grant promptly or start again. And do not approach them before you are actually in a position to grant; a valuation agreed too early simply expires unused.
The valuation is usually the longest single item in setting up a scheme, which makes it the thing to start rather than the thing to leave until the documents are drafted.
Frequently asked questions
What is the difference between AMV and UMV for EMI options?
Actual market value takes account of the restrictions attached to the shares and is the lower figure; it sets the exercise price and determines whether income tax arises on exercise. Unrestricted market value ignores those restrictions and is higher; it measures the £250,000 individual limit and the £6 million company limit.
Do I have to get an EMI valuation agreed by HMRC?
No, it is not compulsory, but it is standard practice and strongly advisable. An agreed valuation means HMRC cannot later challenge the exercise price you used, which is the point at which a dispute would be most expensive.
How long is an HMRC EMI valuation valid?
Ninety days from the date of HMRC’s agreement letter, provided there is no change in the company’s circumstances which would affect the value of its shares. If options are not granted within that window, a fresh valuation is needed.
How much does an EMI valuation cost?
It depends on the complexity of the company and its share structure rather than on a fixed tariff. At Silva the valuation work sits inside the fixed fee for setting up the scheme, so it is not a separate variable line on the bill.
Start with the valuation
It is the longest item in setting an EMI scheme up and the one everything else depends on. Silva runs the valuation, agrees it with HMRC and drafts the scheme around it, at a fixed fee.