Section 13 | Enterprise management incentives: thresholds and period for exercise

(1)In section 529 of ITEPA 2003 (scope of tax advantages: option must be exercised within 10 years)—

(a)in the heading, for “within 10 years” substitute “by the specified anniversary”;

(b)in subsection (2), for “tenth” substitute “specified”;

(c)after subsection (2) insert—

(2A)In this section, “specified anniversary” means—

(a)in cases where the employer company is a specified Northern Ireland company, the tenth anniversary, and

(b)otherwise, the fifteenth anniversary.

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(2)Schedule 5 to ITEPA 2003 is amended as set out in subsections (3) to (7).

(3)In paragraph 7 (maximum value of options in respect of relevant company’s shares)—

(a)in sub-paragraph (1), after “exceed” insert—

(a)£6 million, or

(b)where the employer company is a specified Northern Ireland company,

;

(b)in sub-paragraph (2), after “option if the” insert “applicable”;

(c)in sub-paragraph (4), after “applies” insert “(but see sub-paragraph (5A))”;

(d)after sub-paragraph (5), insert—

(5A)If—

(a)the grant of two or more share options at the same time causes only the limit in paragraph 7(1)(b) to be exceeded, and

(b)the employer company in respect of some of the share options is not a specified Northern Ireland company,

the share options in respect of which the employer company is a specified Northern Ireland company are, for the purposes of this paragraph, to be treated as having been granted before the other share options.

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(4)In paragraph 12 (the gross assets requirement)—

(a)in sub-paragraph (1) after “exceed” insert—

(a)£120 million, or

(b)where the company is a specified Northern Ireland company,

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(b)in sub-paragraph (2) after “exceed” insert—

(a)£120 million, or

(b)where the employer company is a specified Northern Ireland company,

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(5)In paragraph 12A (the number of employees requirement)—

(a)in sub-paragraph (1) after “less than” insert—

(a)500, or

(b)where the company is a specified Northern Ireland company,

;

(b)in sub-paragraph (2) after “less than” insert “500 or, where the employer company is a specified Northern Ireland company,”

(6)In paragraph 36 (option to be capable of exercise within ten years)—

(a)in the italic cross-heading, for “10 years” substitute “the specified period”;

(b)in sub-paragraph (1), for “the period of 10 years” substitute “the specified period”;

(c)in sub-paragraph (2), for “the period mentioned in sub-paragraph (1)” substitute “the specified period”;

(d)after sub-paragraph (2) insert—

(3)In this paragraph, the “specified period” means—

(a)15 years, or

(b)where the employer company is a specified Northern Ireland company, 10 years.

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(7)After paragraph 57E, insert—

57FMeaning of “specified Northern Ireland company”

(a)has its registered office in Northern Ireland, and

(b)carries on a trade involving—

(i)a trade in goods, or

(ii)the generation, transmission, distribution, supply, wholesale trade or cross-border exchange of electricity.

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(8)In section 169I(7D)(b) of TCGA 1992 (material disposal of business assets)—

(a)for “tenth ” substitute “specified”;

(b)at the end insert “(with “specified anniversary” having the meaning given in section 529(2A) of that Act)”.

(9)The amendments made by subsections (1) to (8) come into force on 6 April 2026.

(10)On and after 6 April 2026, Schedule 5 to ITEPA 2003 has effect in relation to an option granted before 6 April 2026 as if the following paragraph were inserted after paragraph 37—

37A

(1)Sub-paragraph (2) applies if—

(a)on or after 26 November 2025, a fixed-date qualifying option is varied so as to delay the date on which it can be exercised,

(b)the variation takes place on or before the tenth anniversary of the grant of the option, and

(c)the variation results in an option that is capable of being exercised on a single date falling on or before the fifteenth anniversary of the grant of the option.

(2)An option that is varied as described in sub-paragraph (1)—

(a)continues to be a qualifying option for the purposes of the EMI code, and

(b)is to be treated for the purposes of the EMI code as having been granted in its varied form.

(3)In sub-paragraph (1)—

(a)“fixed-date qualifying option” means a qualifying option granted before 6 April 2026 that is capable of being exercised on a single date set by reference to its date of grant, and

(b)a reference to an option being varied is a reference to its being varied by written agreement between the person who granted the option and the person entitled to exercise it.

(4)Sub-paragraph (2) does not apply in relation to an option if, at the time of variation, the employer company is a specified Northern Ireland company.

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