Article updated on 28 November 2025 following an announcement in the 2025 Budget
HMRC's November 2025 Employment-Related Securities Bulletin, taken together with the government's more recent 2025 Budget, explains how Enterprise Management Incentive (EMI) and Company Share Option Plan (CSOP) rules interact with PISCES – a new share trading framework for qualifying private companies.
If you would like employees to be able to exercise options and sell shares during a PISCES trading window while keeping the tax advantages of EMI/CSOP, you need to make sure your option scheme documents allow it in the right way.
Why PISCES matters for employee options
PISCES (the Private Intermittent Securities and Capital Exchange System) is a new type of stock market for private company shares, which enables shares in qualifying private companies to be bought and sold during scheduled trading windows. Some employers may decide that they would like employees with share options to be able to exercise their options and then sell their shares during these windows, to realise the value in their shares.
The key timing point
HMRC has made a practical concession for EMI and CSOP options that already exist, but the timing will be important.
- If the option is granted before 6 April 2028, employers can generally amend the option's terms to add a PISCES-linked exercise right without losing the tax benefits, as long as the amendments are made appropriately.
- If the option is granted on or after 6 April 2028, you will not be able to add a new PISCES exercise right later without removing the EMI/CSOP tax treatment. HMRC would treat that change as so fundamental that it is effectively a new, typically non-qualifying option.
Originally this deadline was set to be when the Finance Bill 2025-26 receives Royal Assent, as noted in HMRC's Bulletin, but an extension to 6 April 2028 has been announced in the 2025 Budget.
What employers should do
For existing options, you may wish to consider whether to amend them to allow exercise during PISCES windows, taking care to draft the changes so they preserve tax-advantaged status. On/after 6 April 2028, you will need to consider building appropriate PISCES exercise provisions into the option terms from the start. Because plan drafting and amendments can affect tax qualification, employers should take specialist advice on the wording and timing.
In any case, employers who are interested in allowing employees to exercise their options in connection with PISCES events will need to carefully consider whether this is right in their circumstances, and work through the legal, tax and practical issues that arise if employees are to be given a new right of exercise. There remain some uncertainties around how PISCES is expected to work in practice in relation to employee share plans, and we share further thoughts on this here.
Additionally, employers who are operating EMI option schemes (or considering doing so) are advised to familiarise themselves with the upcoming changes to EMI option schemes that were announced in the 2025 Budget. A summary of the changes, and what these mean for companies and employees, can be found here.
Other share plan points in HMRC's Bulletin
HMRC also covers several practical issues that may be relevant to employers running share plans:
- the treatment of managers' "sweet equity" in light of the BVCA Memorandum of Understanding;
- how to handle shares held in a terminating Share Incentive Plan (SIP) when employees cannot be traced; and
- reporting when personal representatives exercise share options after an employee's death.
The Bulletin can be found here.
