Share options for growing companies: EMI, and the new EMI2
Enterprise Management Incentives let small companies reward key people with tax-efficient options. From April 2027, the Company Share Option Plan becomes EMI2, with double the limit.
Equity can bring people in and keep them, especially when a company cannot yet pay top salaries. Enterprise Management Incentives (EMI) let qualifying companies grant options over shares worth up to £250,000 per employee, with no income tax or National Insurance on exercise if the rules are followed, and Capital Gains Tax on a later sale.
What Budget 2026 changes
From 6 April 2027, the Company Share Option Plan, which suits companies that have outgrown EMI or do not qualify for it, is renamed EMI2. Its limit doubles from £60,000 to £120,000 per employee, it can be used alongside the full EMI limit, and options can be exercised for up to 15 years instead of 10.
Show the data
| Until 5 April 2027 | £60,000 |
|---|---|
| EMI2, from 6 April 2027 | £120,000 |
EMI itself becomes more flexible: after a disqualifying event, holders will have 180 days to exercise instead of 90, companies moving to an Employee Ownership Trust keep access to EMI, and the separate notice to HMRC for each grant is replaced by the year-end return.
Getting it right
- Agree a share valuation with HMRC before granting options.
- Decide what the options are for: retention, performance, or a future sale.
- Keep the scheme documents and the annual return up to date.
Sources
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This insight is general information, not advice for your circumstances. Talk to us before acting on it.