UK Government announces changes to employee share option schemes

The UK Autumn Budget 2026 introduces significant reforms to tax-advantaged employee share option schemes. A key measure involves the rebranding of the Company Share Option Plan (CSOP) to ‘Enterprise Management Incentives 2’ (EMI2), effective 28 October 2026.

Starting 6 April 2027, the individual limit for CSOP/EMI2 options will double from £60,000 to £120,000. Additionally, the maximum period for exercising these options will increase from 10 years to 15 years to align with the Enterprise Management Incentive (EMI) scheme.

Crucially, the government will remove the interaction between EMI and EMI2 limits. This change allows companies to use both schemes independently, enabling employees to hold EMI2 options without impacting their existing EMI limits. This is particularly beneficial for companies that have outgrown EMI eligibility or for businesses transitioning toward Employee Ownership Trusts (EOT).