Share Schemes UK 2026/27 — SAYE, CSOP & EMI Tax Guide

Employee share schemes can offer tax advantages, but the result depends on the exact scheme rules, grant date, exercise date, company eligibility and what happens when shares are sold. For 2026/27, SAYE allows savings of up to £500 a month, CSOP has a £60,000 individual option limit, and EMI has a £250,000 individual limit over a three-year period; EMI company limits were expanded for qualifying contracts from 6 April 2026. Estimate the value with the Share Schemes Calculator→.

This guide compares the three schemes, how tax applies at each stage, and the SIP option’s different Income Tax, NI and CGT treatment.

The Schemes Compared

SAYE — Save As You Earn

SAYE (Sharesave) is a savings-related scheme. You can save up to £500 a month for a three- or five-year contract, then use the savings and any tax-free interest or bonus to buy shares at the option price. The option price can be set up to 20% below market value at grant. If buying is unattractive, you can take the savings and bonus in cash. There is no Income Tax or NI on the difference between the option price and the share value under the qualifying scheme rules, but CGT may apply when you sell.

David saves £250 a month for three years. He contributes £9,000, plus whatever tax-free interest or bonus the contract provides. At a £4.00 option price, he can buy the number of shares supported by the final savings balance. If he later sells at £6.00, the disposal gain must be calculated using the scheme cost and the employee-share matching rules; the 2026/27 CGT rates are generally 18% or 24% after the £3,000 annual exempt amount. The savings contributions themselves do not receive Income Tax relief.

CSOP — Company Share Option Plan

CSOP grants options worth up to £60,000 per employee, measured at grant. The option price is normally market value at grant under the scheme rules; the company and share class must qualify, and material-interest rules can exclude some participants. If exercised at least three and no more than ten years after grant while the scheme retains its tax-advantaged status, the option gain is normally free of Income Tax and NI. Early exercise can be taxable unless an exception applies. CGT can apply when shares are sold, using the correct acquisition cost and share-matching rules.

EMI — Enterprise Management Incentives

EMI is available only where the company, trade, option and employee meet the statutory conditions. An employee can receive options over shares worth up to £250,000 in a three-year period. For qualifying contracts from 6 April 2026, the company limits are generally gross assets of £120 million or less, fewer than 500 full-time equivalent employees and £6 million of unexercised EMI options, subject to the detailed rules and specified-company exceptions. The employee must normally work at least 25 hours a week or 75% of total working time for the company. If the option price is at least market value at grant, Income Tax and NI are generally not due on exercise within the applicable period; a discount can be taxable. BADR may apply to qualifying EMI shares held for at least two years, but the rate for disposals from 6 April 2026 is 18%, not 10%.

SIP — Share Incentive Plan

The Share Incentive Plan is the fourth option: employers can give free shares worth up to £3,600 a year, employees can buy partnership shares from pre-tax salary up to £1,800 a year (or 10% of salary, whichever is lower), and employers can match up to 2:1. Holding plan shares for five years gives the full Income Tax and NI advantages; CGT treatment depends on whether shares remain in the plan or are removed, and shares can be transferred to an ISA within 90 days in the circumstances HMRC describes. It is not correct to say every SIP gain is automatically tax-free at any income level.

Reporting

Employers must register and report Employment Related Securities (ERS) schemes under the applicable deadlines. For tax-advantaged schemes and non-tax-advantaged schemes, the annual return is generally due by 6 July following the end of the tax year; the historical 92-day EMI notification rule applies only to certain grants before 6 April 2024. EMI grants from 6 April 2024 are notified by 6 July following the tax year of grant. For unlisted companies, valuation and statutory eligibility rules matter, but an HMRC valuation agreement is not a universal substitute for checking the scheme. Leaving a job can open scheme-specific exercise windows and can change tax treatment, so read the plan rules rather than rely on a generic six-month or 90-day rule.

Compare the offer as a package

The headline option limit is not the same as the value an employee will receive. Record the number of options or shares, the exercise price, vesting or savings period, expiry date, leaver rules, company valuation and the likely sale route. An option that looks valuable at today’s share price may have no cash value if the option expires, the employee cannot fund exercise, or the company’s shares are not readily saleable.

Ask the employer which scheme has been approved, what document governs the award and what happens after resignation, redundancy, retirement or dismissal. A good-leaver provision can be different from a bad-leaver provision, and an exit or takeover can trigger an exercise deadline. Keep a dated copy of the plan rules and any tax summary supplied by the employer, but treat the summary as an explanation rather than a replacement for the statutory conditions.

For an unlisted company, identify how the share price or market value was established and whether the exercise price was agreed or reviewed. The company’s valuation, share class, restrictions and transaction history can affect the relevant tax analysis. Do not use a private funding-round price as a complete answer to the tax value of an employee option. If the company is acquired, the consideration may be cash, shares or a mixture, and each part may need separate review.

At exercise or sale, reconcile the scheme statement with the broker or registrar statement. Record the shares acquired, the amount paid, any Income Tax or National Insurance charged, transaction fees, disposal proceeds and the date of each event. A tax-advantaged exercise does not automatically make a later sale free of CGT. Conversely, a payroll deduction does not automatically represent the acquisition cost for every later calculation.

If the employee moves countries, separate the UK employment event from the later disposal and identify where the work was performed during the relevant period. Residence, duties, treaty claims and foreign withholding can change the result. Obtain the cross-border facts before assuming that a UK-approved scheme produces the same tax outcome in another country.

Valuation, Deadlines and Common Admin Errors

Three administrative details decide whether a scheme keeps its tax advantages. First, ERS reporting: employers must use the current ERS registration and annual-return deadlines, generally 6 July after the tax year, with separate historical EMI notification rules. Second, valuation and eligibility: the option price, company status, share class, working-time test and statutory limits must be checked against the relevant scheme rules. Third, leaving the job: exercise periods and tax consequences vary by scheme and reason for leaving; a generic six-month or 90-day statement is unsafe.

Common risks include missed ERS filings, options outside the statutory limits, incorrect valuation, and exercise after a qualifying period or employment event without checking the tax result. Calendar the 6 July filing deadline, confirm the current scheme rules before grant, and treat the plan’s exercise windows as hard deadlines.

Frequently Asked Questions

Estimate the value of your options with the Share Schemes Calculator→, then read the RSU Tax UK guide for restricted stock and the Capital Gains Tax on Shares guide before selling.

Official sources

• GOV.UK: Save As You Earn (SAYE)
• HMRC Employee Tax-Advantaged Share Scheme User Manual: CSOP
• GOV.UK: Enterprise Management Incentives
• GOV.UK: Submit an EMI notification
• GOV.UK: Share Incentive Plans
• GOV.UK: Employment Related Securities files
• GOV.UK: Capital Gains Tax rates
• GOV.UK: Business Asset Disposal Relief

This guide is general educational information for the UK 2026/27 tax year. It is not tax, investment or legal advice and does not determine the treatment of a particular share scheme.