Granting CSOP Options, there could be another way

Last Updated on 7 April 2026

Many SMEs when wishing to attract, reward, retain and incentivise their employees and key team members have relied on granting options under a Company Share Option Plan (CSOP).  However, from 6th April 2026 you may find that you have become eligible to grant Enterprise Management Incentive (EMI) options as the limits have increased.

What are the limits for granting EMI options?

• You must employ less than 500 employees
• Your company must have gross assets of less than £120m
• The maximum value of EMI options that can be granted is £6m
• The number of un-exercised EMI options a participant can hold is £250k

One point to consider if you are looking to top up your share option arrangements with EMI options, if you have unexercised CSOP options these will count towards the limit of £250k of EMI options you can grant to a participant, so be sure to factor this into your equity modelling calculations.

Another change to consider which has taken effect from 6th April 2026 is that new EMI options can be granted with a lifespan of 15 years. There have been changes in legislation which allow you to extend the life of previously granted EMI options from 10 years to 15 years, but there are a couple of actions to you will need to take for this change to take effect for the historic options you have granted.

What about other EMI qualification limits?

These higher numerical limits clearly expand the scope for companies looking to grant tax advantaged share options.  However you will still need to ensure your company fits the independence test and isn’t undertaking one of the EMI excluded trading activities e.g. banking, property development, receiving licence fees, to name a few.

If you are uncertain if your company would qualify for granting EMI options, perhaps the trade you are undertaking doesn’t fall neatly into one of HMRC categories we can assist you by seeking advance assurance from HMRC that the company granting the options constitutes as a qualifying company under the EMI legislation.

How RM2 can help

At RM2 we specialise in Employee Ownership and the design, implementation and compliance of all types of Share Plan.  If you are considering implementing an EMI now that limits have risen or want to re-examine how a CSOP or EMI can dovetail together contact us at enquiries@rm2.co.uk where we can arrange for you to have a call with one of our specialist advisers.