As announced in Budget 2026, the government will introduce legislation in Finance Bill 2026/27 to make changes to the Company Share Option Plan (CSOP) and Enterprise Management Incentives (EMI) schemes. In summary, the:

• CSOP individual option limit will be increased to £120,000
• interaction between the CSOP and EMI individual options limits will be removed
• CSOP exercise period will be extended to 15 years
• period for certain tax-advantaged and non-tax advantaged shares and share options reserved by third parties to be excepted from the disguised remuneration rules will also be extended to 15 years
• exception for Employee Ownership Trusts (EOTs) in the EMI rules will be extended to companies arranging to become controlled by an EOT
• EMI exercise window following disqualifying events will be extended to 180 days.

Additionally, further legislation is expected to be brought in Finance Bill 2026/27 to remove the requirement for a company to submit a separate notification of a grant of EMI option to HMRC. Instead, a company will be required to notify such a grant through the end-of-year return.

The reforms will make share option schemes more flexible and attractive to businesses and employees, helping companies recruit, retain and reward talent.

Higher CSOP limits and extended exercise periods will give employees greater opportunities to benefit from company growth, while changes to EMI and Employee Ownership Trust rules will provide greater flexibility for businesses pursuing employee ownership.

The changes will take effect from 6 April 2027.