Enterprise management incentives widened

A relaxation to the qualifying limits will mean that scale-up companies, not just start-ups, will be able to offer enterprise management incentives (EMI) taxadvantaged share options to employees from 6 April 2026.

There is generally no tax charge when EMI share options are granted to an employee or when options are exercised. A capital gains tax (CGT) liability could arise when the shares are sold, but the gain will potentially qualify for a flat rate of CGT of 14% (18% from 6 April 2026).

The maximum market value of unexercised EMI share options that an employee can hold in a three-year period is £250,000.

Qualifying limits

The following changes will apply to EMI contracts granted from 6 April 2026:

• Although there is no limit to the number of employees who can be granted options, the maximum market value of unexercised EMI options granted by a company cannot currently exceed £3 million. This will increase to £6 million.
• A company currently has to have gross assets of £30 million or less and fewer than 250 full-time equivalent employees. These limits will respectively be raised to £120 million and 500 employees.
• The maximum exercise period for EMI options is to be extended from 10 years to 15 years.

Companies will be able to retrospectively apply the 15-year exercise period to existing EMI share option contracts.

Company considerations

Companies which have not previously qualified for EMI should review whether they will now qualify, and whether EMI options are the right choice for future employee equity incentives.

Similar considerations apply if a company has previously qualified but then exceeded the gross assets or employee limits as the company has grown, or the company has hit the £3 million limit for unexercised EMI options.

Companies with existing EMI options should decide whether they want to extend the exercise period to 15 years.