What’s changing
EIS
- Annual company investment limit raised to £10m (£20m for knowledge-intensive companies)
- Lifetime limits also doubled to £24m and £40m respectively
- Gross assets limit increases to £30m before share issue and £35m afterwards
- Changes apply from 6 April 2026
VCT
- Similar increases in VCT investment limits to those above
- VCT income tax relief to be reduced from 30% to 20%
EMIs
- Employee limit increases to 500
- Gross assets limit increases to £120m
- Company share option limit increases to £6m
- Maximum holding period increases to 15 years
- Larger, later-stage companies can continue using these schemes for longer
- All expected to apply from 6 April 2026
- EMI notification requirement to be abolished from 6 April 2027
- Existing EMI and company share option plan (CSOP) contracts can be amended to include PISCES (Private Intermittent Securities and Capital Exchange System) as an exercisable event. This will be legislated for in Finance Bill 2026-27. The legislation applies to contracts agreed before 6 April 2028, and the changes take effect retrospectively from 15 May 2025
EOTs
- Reducing capital gains tax (CGT) relief on qualifying disposals to EOTs from 100% to 50% from 26 November 2025
- The additional tax is likely to put some companies off EOTs, in favour of selling to trade to get a higher price. This may also mean that companies that aren’t right for employee ownership avoid exploring it
How BKL can help
Our corporate finance team specialise in advising privately owned businesses and their owners – entrepreneurs, shareholders and management teams – on the full breadth of corporate finance transactions. These include mergers, acquisitions, disposals, due diligence and valuations.
If your business is navigating significant changes like these, our fractional CFO services are designed to match your unique needs. our team of specialist consultants, provide tailored support at the level you require. This covers strategic planning, financial modelling, risk management, systems implementation, and operational guidance for your finance function.
For a chat about how we can help guide your business through transactions and major change, get in touch with Daniel Shear or Vicki Johnson, or send us an enquiry.
