Autumn Budget 2026: Changes to share schemes and what they mean for you

Yesterday, the Chancellor announced a series of positive changes to EMI and CSOP schemes which are due to come into force from 6 April 2027. These changes show that the current government remains committed to tax-efficient equity incentives for employees and recognises their value as effective tools for delivering growth. Here is a summary of what has been announced and what the measures could mean for you.

CSOP to “EMI 2”

The first surprise announcement was that tax-efficient company share option plans (CSOPs) are to be renamed “EMI 2”. Whilst this is just the rebranding of a type of share scheme which has been around for decades, the other changes announced yesterday show that CSOPs should be seen as complementary to EMI options, rather than a less generous alternative.

CSOP individual limit doubled to £120,000

Currently, an individual cannot hold more than £60,000 worth of shares under tax-efficient CSOP options at any given time. This “individual limit”, and the equivalent limit for EMI options, are measured by reference to their unrestricted market value (“UMV”) on grant.

From 6 April 2027, the CSOP individual limit will be increased to £120,000. Whilst this still falls short of the equivalent limit for EMI options (which is staying at £250,000), it is a welcome change and creates more headroom for employers where EMI options are not possible.

EMI and CSOP limits to operate independently

Under the current rules, CSOP options are counted towards the £250,000 individual limit for EMI options. From the start of the 2027/28 tax year, the EMI and CSOP individual limits will operate independently.

Provided that the other qualifying conditions which apply to both of these schemes are met, companies will be able to grant a combination of EMI and CSOP options over shares worth up to £370,000 per employee (measured as UMV on the date of grant).

This will be particularly useful for businesses looking to offer further tax-efficient options to critical members of their workforce who have already reached their EMI individual limits.

Other measures

Alongside the main headlines, some further technical changes were announced for CSOP and EMI schemes.

These will also come into force from 6 April 2027, although it is not yet clear whether these will apply retrospectively to options which have already been granted:

1. Extension of CSOP exercise period from 10 years to 15 years
At present, in order for an option to qualify as a tax-advantaged CSOP it must be exercised within 10 years of being granted. This period will be extended to 15 years from the date of grant.

2. EMI disqualifying event window extended to 180 days
The EMI legislation says that if an EMI option is granted and a disqualifying event then happens (such as the employee becoming a leaver, or the granting company becoming controlled by another company), tax-advantaged status will not be lost if the option is exercised within 90 days. This will be doubled to 180 days, allowing more time to manage the exercise process in these circumstances without losing EMI tax advantages.

3. EMI options and Employee Ownership Trusts (EOTs)
As it currently stands, the EMI legislation prevents a company from granting qualifying options if it is under the control of another company, or there are arrangements under which it could come under such control when the options are granted. There is already a helpful carve-out for companies which are already controlled by an EOT when the options are granted, but not for companies which are preparing to sell to an EOT. The Chancellor’s announcement yesterday suggests that the legislation will be changed to close this gap.