From 6 April 2026, important changes to the Enterprise Management Incentive (EMI) scheme will take effect. The eligibility limits are being extended, increasing the number of companies that will be able to access EMI and providing greater flexibility for both businesses and option holders.
Increased company size thresholds
For EMI options granted on or after 6 April 2026, the following limits will apply:
- The Unrestricted Market Value (UMV) of company shares under option will increase from £3 million to £6 million.
- The gross assets limit will increase from £30 million to £120 million.
- The employee limit will increase from 250 employees to 500 employees.
These changes significantly widen the scope of the scheme and will allow larger and growing businesses to continue using EMI as a tax-efficient incentive arrangement.
Extension of the exercise period
In addition to the increased eligibility thresholds, the maximum exercise period for EMI options will be extended from 10 years to 15 years.
This change can apply retrospectively to existing EMI options that have not already lapsed or been exercised. As a result, existing option agreements may be amended to extend the exercise period to 15 years without losing the associated EMI tax advantages.
This will be particularly welcome news for companies and option holders who are approaching the current 10-year limit. Where appropriate, option agreements may be amended to reflect the new 15-year period, preserving the tax benefits available under the EMI scheme.
Considerations for existing EMI schemes
When EMI option plans were originally implemented, a standard 10-year exercise period would have been included in the documentation. In many cases, the earliest outstanding EMI options were granted several years ago. For example, options granted in 2019 would ordinarily lapse in 2029 if they remain unexercised and unamended.
If no action is taken and the 10-year limit is reached, the options will lapse. Should the company wish the individual to continue holding options and maintain a stake in the business, new options would need to be granted at that time. Companies may therefore wish to review their existing EMI arrangements and consider whether extending the exercise period for all outstanding option holders would be appropriate, provided the options have not already lapsed or been exercised.
Next steps
Although these changes take effect from 6 April 2026, businesses with existing EMI schemes should begin reviewing their arrangements in advance. Identifying grant dates and potential lapse dates will help ensure that options do not expire unintentionally.
If you have any queries regarding the upcoming changes or would like advice or assistance in implementing the extended exercise period, please contact the team.
