Enterprise Management Incentives (EMI) Schemes – Expanded Opportunities from April 2026

Following the enactment of the 2025 Autumn Budget we can start thinking about how the changes made can impact your business. One area that saw significant changes were Enterprise Management Incentive Schemes (EMI).

So, what are they? EMI schemes are highly effective share-based incentive arrangements designed to help small and medium-sized enterprises (SMEs) attract, motivate, and retain key employees by giving them a real stake in the future success of the business. The EMI regime, in brief, enables qualifying businesses to grant an option to an employee to acquire shares at some point in the future. This can be done extremely tax efficiently, with potentially no income tax or National Insurance Contributions being due when the employee acquires shares. There is even the possibility of claiming a corporation tax deduction when shares are acquired; implementing a share scheme can result in a negative tax rate!

Most importantly, the promise of acquiring shares in the business acts as a huge incentive for the employee to succeed in their role – and stay in the business – helping to achieve the objectives and targets of the business as a whole (indeed, these objectives can be written into the EMI contract itself). More details on the EMI regime can be found here.

With the significant enhancements announced in the Budget, EMI schemes will become accessible to a broader range of businesses from 6 April 2026.

The revised thresholds substantially increase eligibility and flexibility:

• The maximum permitted value of gross assets of the company or group granting options has been increased to £120 million (previously £30 million).
• The number of employees of the business has increased to 500 (previously 250).
• The total value of unexercised EMI options has increased to £6 million (previously £3 million).
• The maximum exercise period during which time an EMI share option has to be capable of being exercised has been extended to 15 years (previously 10 years).

The first three changes are relevant thresholds applying to companies granting new share options whereas the final change applies to both existing and new share option contracts between the company granting and the individual holding the options.

These changes create new planning opportunities for growing businesses and scale-ups that were previously outside the EMI regime.

One of the most valuable updates is the extension of the qualifying exercise period from 10 to 15 years. This enhancement can also apply to existing EMI schemes, provided certain conditions are met:

• The option agreement must be formally amended
• The extension must align with the terms of the existing option agreement
• Options must be exercised after 6 April 2026

In many cases, extending the exercise period can be achieved through a straightforward written agreement between the company and the option holder. For event-based options (such as those triggered on a business sale – commonly described as “Exit Options”), amendments can often be made in accordance with the terms of the option agreement without impacting the fundamental terms of the option.

Extending the date when the option would otherwise lapse (i.e. expire) from 10 to 15 years.

Expanding the period when an individual can exercise their options, for time-based options. An example might be from, say between 8 and 10 years from the anniversary of the grant date, to between the 8th and 15th anniversary.

For EMI options granted before 6 April 2026 with a fixed exercise date, additional flexibility is available under specific legislative provisions. These allow the exercise date to be extended up to the 15th year anniversary of the grant without losing tax-advantaged status, provided:

• The option was granted before 6 April 2026 and is exercisable on a fixed date.
• The variation occurs after 26 November 2025 and before the original 10-year expiry.
• The revised exercise date falls before the 15th anniversary date of grant.
• The option has not already been exercised or lapsed.

As with other amendments, changes must be documented through a written agreement between the company and the option holder. While no prescribed format is required, clear documentation of the revised terms is essential.

These changes present a valuable opportunity to review both existing EMI schemes and future incentive strategies. Our team can assist with:

• Assessing eligibility under the new thresholds.
• Designing and implementing EMI schemes tailored to your business, including share valuations.
• Reviewing of, and advice in relation to, amending existing option agreements.
• Ensuring compliance with HMRC requirements while preserving tax advantages, including annual or periodic reviews, checking ongoing requirements relating to EMI continue to be met.

At Old Mill, our later life planning team includes advisers accredited by the Society of Later Life Advisers (SOLLA), bringing specialist expertise to what is often a complex and sensitive area.

We work with individuals and families to provide a clear, step-by-step approach to later life planning, including care funding, financial structuring and long-term cashflow modelling. Our aim is to help clients make informed decisions with confidence, at a time when it matters most.

An initial conversation is available without charge, offering the opportunity to explore your position and understand the options available to you.

If you would like further advice from our specialist team for later life care, speak to your usual Old Mill adviser or contact Simon Valentine-Marsh.

If you would like further advice on the EMI scheme, maximising the benefits and staying compliant, contact us.