The Chancellor delivered her Spring Statement on 3 March 2026. It was a low-key affair, and the Chancellor did her best to avoid the theatre and drama of recent Budgets. However, there are a number of significant tax measures slated to take effect from April 2026 which the Chancellor did not discuss. In this article we consider seven of these measures.
1. Capital gains tax: Business Asset Disposal Relief (“BADR”)
Subject to meeting certain qualifying conditions, individuals that dispose of shares in a trading company/ certain trading assets have a £1m lifetime allowance which enables capital gains tax rates to be cut from 24% to 14%.
From 6 April 2026, this favourable treatment becomes less generous and the 14% rate increases to 18%.
What does this mean for me?
If you are acting on a disposal on which BADR is applicable, make sure that the disposal takes place before 6 April 2026. Disposal has a technical tax meaning, so you may wish to discuss this with tax colleagues if you are on a matter which could run up close to the deadline.
2. Enterprise Management Initiative (“EMI”) share options
EMI options are the most tax favourable share option scheme, allowing the option holder’s return to be taxed as a capital gain (with BADR potentially being available on it too).
Naturally, the grant of EMI options is subject to tight restrictions as the associated tax advantages are generous.
The good news is that from 6 April 2026 some, but not all, of the restrictions are to be relaxed. (Northern Ireland has its own bespoke status and is not considered in this note.)
Here are the relaxations. The overall limit on the value of shares subject to unexercised EMI options is to increase from £3m to £6m. The gross assets threshold for the grantor company quadruples from £30m to £120m. The employee headcount threshold doubles from 250 to 500.
Currently, EMI options are subject to a 10-year exercise window during which they can be exercised on a tax-advantaged basis. This is to be extended to 15 years. Further, in an additional act of generosity, existing options can be varied to extend the exercise window from 10 to 15 years.
What does this mean for me?
This is a great opportunity to talk to clients that have not been able to put EMI options in place to date due to the current limits, as they may now have become eligible under the new rules. Further, clients that have granted EMI options, which could lapse due to the 10-year exercise window, may be able to extend the option lives by increasing the exercise period to 15 years.
3. EMI options and PISCES
The PISCES platform provides a great opportunity to enable shares in unlisted companies to be traded.
Many EMI option schemes have been implemented before the PISCES platform was created.
From and including 6 April 2026, until the close of business on 5 April 2028, EMI option schemes can be amended to allow option exercise on a PISCES trading window without disqualifying the option.
What does this mean for me?
This is a great opportunity to speak to clients that are considering using PISCES to amend their existing EMI option schemes.
4. Growth capital funding: the Enterprise Investment Scheme (“EIS”) and Venture Capital Trusts (“VCTs”)
Start-up and scale-up companies may wish to raise equity growth capital as an alternative to debt finance.
The EIS offers tax relief for individuals who provide growth capital, whereas the VCT scheme offers tax relief for individuals who invest in listed investment companies, which in turn provide growth capital (with those investment companies in turn having various tax advantages).
To date, the EIS and the VCT schemes have been constrained by the size limits which have been imposed on investee companies. These limits are being relaxed:
- the gross assets threshold for the investee company before the share issue increases from £15m to £30m;
- the gross assets threshold for the investee company after the share issue increases from £16m to £35m;
- the annual amount which the investee company can raise under the schemes increases from £5m to £10m (however, for knowledge intensive companies, the increase is from £10m to £20m);
- the total funding which a company can raise under EIS/ VCTs in its lifetime increases to £24m from £12m.
What does this mean for me?
This is a great opportunity to speak to companies that wish to raise growth capital about the opportunities now available under the new more relaxed rules.
5. Tax rates for individuals on dividends
Individuals are taxed on dividends at lower rates than the headline income tax rates to reflect the point that dividends are paid by companies from taxed profits.
From 6 April 2026, the income tax rate for basic rate taxpayers on dividend income increases from 8.75% to 10.75%, and the income tax rate for higher rate taxpayers increases from 33.75% to 35.75%. The 39.35% rate for additional rate taxpayers will remain unchanged.
What does this mean for me?
Companies that have shareholders who are basic or higher rate taxpayers may wish to pay dividends out before the current tax year ends.
6. Umbrella companies
Umbrella companies are companies which supply their employees to agencies or directly to end user clients. The Government and its predecessor have had long standing concerns about PAYE and NIC non-compliance by umbrella companies.
The bottom line is that from 6 April the party which is closest to the umbrella company in the labour supply chain is jointly and severally liable with it for the PAYE and NIC.
Tax legislation being tax legislation, certain entities which are not obviously umbrella companies are treated as umbrella companies: this deeming can catch some employment agencies and even personal service companies.
Our colleague James Gopsill has written about the risks inherent in this new legislation. Read more about this here.
What does this mean for me?
If third parties are supplying their employees to your clients (including employment agency clients) you may wish to contact a member of our tax team about the operation of the new rules.
7. Inheritance tax: agricultural and business property relief (“APR/ BPR”)
In October 2024, the Chancellor announced that the 100% APR/ BPR relief for shares in certain unlisted trading companies would be cut to 50% from 6 April 2026. This produces an effective 20% inheritance tax rate. There have been some twists and turns along the road; notably the Chancellor announced before last year’s Winter Break that this would be subject to a £2.5m allowance per individual.
Every family unit is different; however, for some individuals, transfers into family trusts may mitigate the impact of these rules. And, for some, there may be particular efficiencies if the transfers into the family trusts occur before 6 April 2026.
What does this mean for me?
If you have clients that may be affected by these rules, please reach out to our private client colleagues.