The Employee Share Scheme rules have been relaxed to help businesses attract, incentivise and reward employees. The changes, which take effect from 6 April 2027, will increase the value of share options available under the Company Share Option Plan (CSOP), extend exercise periods and provide greater flexibility for companies and employees.
The individual CSOP option limit will double from £60,000 to £120,000. In addition, CSOP options will no longer count towards an individual's Enterprise Management Incentive (EMI) option limit, allowing employees to benefit from both schemes independently.
The maximum exercise period for CSOP options will increase from 10 to 15 years. This extension will also apply retrospectively, allowing existing option agreements to be amended, subject to the legislation, without losing their tax advantages. Moving forward, CSOP will be referred to as EMI2.
Other changes include extending the period for certain tax-advantaged and non-tax-advantaged share options reserved by third parties from 10 to 15 years and extending the EMI exception for companies transitioning to Employee Ownership Trust (EOT) ownership.
The period in which employees can exercise EMI options following a disqualifying event will also increase from 90 to 180 days.

