CSOP Becomes EMI2: Share Option Limit Doubles to £120,000 from April 2027
The Company Share Option Plan has been renamed EMI2 and, from 6 April 2027, its individual option limit doubles from £60,000 to £120,000, with the maximum exercise period extended from 10 to 15 years.
By Entrepreneur Group · Published
The Company Share Option Plan (CSOP) is now called Enterprise Management Incentives 2 (EMI2), and from 6 April 2027 the value of options each employee can hold under it doubles from £60,000 to £120,000. The changes were announced in the Autumn Budget on 28 October 2026, alongside a longer exercise period and more flexibility for companies using EMI.
For scale-ups that have grown too big for EMI, or want to offer more than EMI allows, the changes make tax-advantaged share options a more practical tool for hiring and keeping staff.
What changes from April 2027
HMRC's policy paper on employee share schemes lists six changes, taking effect from 6 April 2027:
- Higher EMI2 limit: the individual option limit rises from £60,000 to £120,000.
- No overlap with EMI: EMI2 (CSOP) options will no longer count towards an employee's EMI limit.
- Longer exercise period: the maximum EMI2 exercise period rises from 10 to 15 years. This applies retrospectively, so existing agreements can be amended.
- Third-party reserved options: the period in which certain options reserved by third parties are excluded from the disguised remuneration rules rises from 10 to 15 years.
- Employee ownership: EMI companies with arrangements in place to become controlled by an Employee Ownership Trust can keep granting qualifying EMI options.
- More time after a disqualifying event: employees get 180 days, up from 90, to exercise EMI options after an event that ends EMI status.
HMRC says the aim is to make the renamed scheme a complement to EMI and a follow-on scheme for companies that have outgrown EMI. Changes will be made in Finance Bill 2026-27.
How EMI and EMI2 compare
HMRC's guidance on EMI and EMI2 sets out the current limits. Since 6 April 2026, a company can use EMI if it has gross assets of £120 million or less and fewer than 500 full-time employees. Employees can hold EMI options worth up to £250,000 over three years and must work at least 25 hours a week or 75% of their working time for the company.
EMI2 can generally be offered by companies of any size and sector, but the individual limit is lower: £60,000 for options granted from 6 April 2023, rising to £120,000 from 6 April 2027. The legislation will keep the CSOP name, so you may see both terms.
Who benefits
HMRC estimates that in 2024-25 about 30,000 employees were granted CSOP options, at about 390 companies, while about 4,840 companies granted EMI options. It expects the higher limit and the removal of the overlap to benefit about 36,000 employees and about 380 companies between 2027-28 and 2031-32. The longer exercise period should help about 6,000 employees, and the 180-day window about 950.
The administrative impact on businesses is described as negligible, with one-off costs such as familiarisation, training, software and legal fees. Employees do not need to do anything to benefit.
What this means for founders
This section is editorial guidance, not tax or legal advice.
- Check which scheme fits. If you still meet the EMI limits, EMI usually allows larger grants. EMI2 suits companies that have outgrown EMI or want to grant beyond EMI limits.
- Time new grants. The £120,000 EMI2 limit applies to options granted on or after 6 April 2027. Talk to your adviser before delaying or bringing forward grants.
- Review existing CSOP agreements. The 15-year exercise period can be applied to existing agreements, which may help employees at companies where an exit is taking longer than expected.
- Update your offer letters. Candidates may now ask about EMI2, so explain the scheme in plain terms in your hiring materials.
Frequently asked questions
What is EMI2?
EMI2 is the new name for the Company Share Option Plan (CSOP), a tax-advantaged share option scheme. HMRC began using the name on 28 October 2026, although the legislation keeps the CSOP name.
What is the EMI2 option limit from April 2027?
The individual EMI2 option limit rises from £60,000 to £120,000 for options granted on or after 6 April 2027. EMI2 options will no longer count towards an employee's EMI limit.
What are the EMI company limits in 2026?
From 6 April 2026, a company can use EMI if it has gross assets of £120 million or less and fewer than 500 full-time employees.
Sources
- HMRC: Changes to employee share schemes, including CSOP and EMI (28 October 2026) (reviewed 29 October 2026)
- HMRC: Enterprise Management Incentives (EMI) and EMI2 (28 October 2026) (reviewed 29 October 2026)