If you run a business or work for one that offers share options, you’ve probably heard of Enterprise Management Incentive Schemes (EMI Options). They are a popular way for companies to reward key employees by letting them buy shares in the future at today’s price. If the business grows, the employee shares in that success.
But the rules haven’t always worked perfectly. The good news? From April 2026, things are getting better.
What Is an EMI Option?
An EMI Option lets companies give employees a right to buy shares on a future date or event (such as a sale) at a price agreed today.
If the company grows, the employee benefits from that growth, as well as certain tax reliefs (as does the company).
It’s basically a long‑term reward for helping the business succeed over a period of time.
The Big Problem with the Current Rules
Right now, the tax benefits for EMI Options expire after 10 years. However, the problem with the 10-year limit is that if the company doesn’t achieve the growth, it expected or hasn’t had an exit event (such as a sale) within 10 years, the options lapse and the only fix is to give the employee new options. However, any new options will be granted at the date of the new option is entered into which may mean a much higher share price and the employee loses all the growth they helped to create.
A real‑world example:
- Options are granted in 2016 at £5 per share;
- By 2026 the shares are worth £20;
- The conditions to exercise the option have not been met as no sale has been achieved;
- The 10 years are up, so existing options lapse; and
- New options are granted at £20 per share.
Based on this example, the employees lose the entire £15 of growth they have created and there will need to be a difficult conversation between the company and the employees about entering into new options without being rewarded for their efforts to date.
Changes from 6 April 2026
- EMI Options will last 15 years (not 10).
From April 2026:
- All new EMI Options will last for 15 years allowing smaller companies more time to grow and reward employees with greater growth; and
- Existing EMI Options will also get the benefit of the addition 5 years, as long as they haven’t already expired.
- More companies can offer EMI Options
From April 2026 the criteria for companies to qualify for EMI Options also increases to open them up to bigger, faster‑growing businesses:
- The cap on the value of assets goes up to £120m from £30m;
- Employee limit increased to 500 employees from 250; and
- The total value of EMI Options goes up to £6m from £3m.
This means that companies that have already grown to a certain size can continue to utilise EMI Options to incentivise their staff in order to grow to the next stage of their business.
- Companies need to update their paperwork
Unfortunately, the 15‑year extension won’t automatically apply if the option paperwork states that it will lapse after 10 years (which most, if not all will). So companies will need to review their existing EMI Option agreements to see if any changes need to be made before re-issuing them.
Why These Changes Matter
In short, the new rules mean:
- employees keep more of the growth they helped to create;
- companies don’t have to enter into new options at much higher values, which will save them time and cost;
- there’s less pressure to rush a sale;
- larger companies can qualify for EMI; and
- people will stay longer in the business because their options stay valuable for longer
It’s a win for everyone.
What Companies Should Do Now
✔ Review your existing EMI agreements
✔ Make sure you can update the expiry to 15 years
✔ Check if your company qualifies under the new limits
✔ Update internal processes for future grants
✔ Tell your employees what’s changing
✔ Get legal advice so everything stays compliant
Get In Touch
Scott Sands is a Partner and Head of our Corporate team at Slater Heelis. Scott and his team advise businesses on EMI Option Schemes and wider equity planning, helping companies understand the rules and stay compliant as the regime changes in April 2026.
If your business runs an EMI scheme or is thinking about introducing one, our Corporate and Commercial team can review your documents, update your agreements and provide clear, practical guidance.
Call us on 03300 297 347 or use our contact form to arrange a consultation.
