The EMI scheme changes introduced in April 2026 have widened access to tax-advantaged employee share options across the UK.
Higher qualifying limits mean more growing businesses may now be able to use Enterprise Management Incentives. This includes some that did not qualify under the previous thresholds or had outgrown them.
How Enterprise Management Incentives work
EMI share options can help businesses reward and retain key employees.
They give an employee the option to buy shares at a price agreed in advance. The option can then be exercised at a set time or when a specified performance target is met.
An employee can hold unexercised EMI options with a maximum market value of £250,000 within a three-year period.
The tax advantages of EMI options
There is generally no tax charge when EMI options are granted to an employee or when they are exercised, provided the relevant conditions are met.
Capital gains tax may apply when the shares are eventually sold. Depending on the circumstances, the gain could qualify for a flat rate of 18%.
Higher qualifying limits from April 2026
The following limits apply to EMI options granted from 6 April 2026:
- The maximum market value of unexercised EMI options granted by a company has increased from £3 million to £6 million.
- The gross-assets limit has risen from £30 million to £120 million.
- The employee limit has increased from fewer than 250 to fewer than 500 full-time equivalent employees.
- The maximum period in which an EMI option can be exercised has increased from 10 years to 15 years.
The 15-year exercise period can also be applied retrospectively to EMI option contracts granted before the changes took effect.
Could your business now qualify?
Businesses that did not meet the previous limits may now be eligible for EMI.
It may also be worth taking another look if the business previously qualified but later exceeded the old gross-assets or employee thresholds as it grew. The same applies where it reached the former £3 million limit for unexercised EMI options.
Meeting the headline limits does not automatically confirm eligibility, but the changes may make EMI available to businesses that had previously ruled it out.
Reviewing existing EMI options
Businesses with existing EMI arrangements should consider whether extending the exercise period to 15 years would be appropriate.
The changes may also provide a useful opportunity to review whether EMI options remain the right choice for future employee share incentives.
Further information on Enterprise Management Incentives and other employee share schemes is available here.