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How should you price the options?

The strike price of the options can be freely determined by the issuing company. However, it generally makes sense to set it at the market value of the shares which are the subject of the options as at the date of grant of the option. HMRC will agree such a value with the company for the purposes of pricing their options. If the strike price is set lower than this amount there will be an income tax charge when the options are exercised.

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