PISCES and share schemes
What you need to know
TL;DR: EMI and CSOP options can be amended to include PISCES as an exercise event while keeping tax advantages (subject to conditions). Unapproved options gain liquidity but no new tax break, and may trigger early PAYE/NIC. SIP and SAYE aren't directly covered by the legislation, though shares already released from those schemes could potentially be sold via PISCES. Getting documentation and agreements right beforehand is key. Take professional advice before participating.
One of the most significant things about PISCES is what it does for the people who are part of share schemes. Employees now have another potential route to partial liquidity, and one that does not depend on an acquisition or IPO.
However, it’s important to note that this is not automatic; it requires the company to choose to participate in PISCES and for the option agreement to include a trading window as a specified exercise event.
How PISCES interacts with each UK share scheme type differs, and the details matter. This page covers the relationship with each of the main schemes. For tax implications, see here.
Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal or financial advice.'
PISCES: what it means for share schemes
- Enterprise Management Incentive (EMI)
- Company Share Option Plan (CSOP)
- Unapproved share option scheme
- Share Incentive Plan (SIP)
- Save As You Earn (SAYE)
1. EMI
Enterprise Management Incentive (EMI) is the UK's most widely used tax-advantaged share option scheme. And it’s the scheme where PISCES has the most to offer.
The core benefits of EMIs are well established:
- Employees pay no income tax or National Insurance on the gain when they exercise their options, provided the statutory conditions are met.
- Employees pay Capital Gains Tax only when they sell the shares, and where Business Asset Disposal Relief (BADR) applies, at a preferential rate. The result is a highly tax-efficient route from option grant to realised value.
Even where EMI schemes allow early exercise, converting the resulting shares into cash has historically depended on finding a willing buyer, a slow, complex process with no guarantee of success. PISCES addresses that directly.
Under legislation in the Finance Bill 2025-26, a PISCES trading window can be included as a specified exercise event in an EMI option agreement.
That means employees can exercise their options and sell the resulting shares through a scheduled, regulated trading event without requiring the company to sell or list.
The tax treatment is preserved: the gain on exercise is not treated as employment income, and CGT applies only on disposal.
There is one important point on BADR timing. The standard holding period condition for BADR is two years.
For EMI shares, the holding period runs from the date of option grant rather than the date of exercise, which means employees can exercise immediately before a PISCES event and still qualify for the preferential CGT rate provided all other conditions are met.
The BADR rate on qualifying disposals is 18% from 6 April 2026. For employees planning to sell through a PISCES event, the timing of that event relative to the BADR rate change is worth considering.
The government has expanded EMI eligibility thresholds significantly:
- The EMI unexercised share limit has doubled from £3m to £6m
- The gross assets threshold rose to £120 million
- The employee headcount limit is now 500
More companies will now qualify for EMI, and more will be in a position to use PISCES alongside it.
2. CSOP
Company Share Option Plans (CSOP) offer similar tax advantages to EMI, with no income tax or NIC on exercise, CGT on disposal, but with different eligibility parameters.
Unlike EMI, there are no restrictions on company size, gross assets, or trade type, making CSOP the relevant scheme for companies that do not qualify for EMI, including larger businesses and those in excluded sectors.
The CSOP position mirrors EMI. Legislation in the Finance Bill 2025-26 allows companies to amend existing CSOP contracts to include a sale on a PISCES platform as a specified exercise event without losing tax-advantaged status, provided all other requirements of the scheme continue to be met.
For new CSOP grants, PISCES should be included as a specified exercise event from the outset where participation is anticipated. For existing agreements, the amendment process applies in the same way as for EMI.
Amending existing EMI and CSOP agreements
Most companies with existing EMI or CSOP schemes will need to amend their option agreements to include PISCES as an exercise trigger. The legislation makes this possible without losing tax-advantaged status, but the process has specific conditions that must all be met.
The key requirements, confirmed by HMRC's technical note and the Finance Bill, are:
- The option agreement must have been granted before 6 April 2028
- The amendment must take effect on or after 15 May 2025
- The amendment must be made in writing, either as a written agreement with the individual option holder, or via written notice served on them by the company
- All other requirements of the relevant scheme must continue to be met
Where these conditions are met, the inclusion of PISCES will be treated as if it had been included in the contract at the time of the original grant.
Reliance on discretionary provisions will not preserve tax-advantaged status. From 6 April 2028, any PISCES provision must be included at grant, so subsequent amendments may affect tax-advantaged status.
Where the conditions are not met, HMRC is likely to treat the change as a surrender and re-grant of the option at today's valuation.
The tax consequences can be significant, particularly where the company's valuation has increased substantially since the original grant date, and the option may lose tax-advantaged status altogether.
Legal advice is worth seeking, and option holders should give their consent before any changes are made.
3. Unapproved options
Unapproved options offer commercial flexibility but without the income tax and NIC advantages of EMI or CSOP. Any gain on exercise is treated as employment income, subject to income tax and, where shares are readily convertible assets, Class 1 NIC.
PISCES creates a practical opportunity for unapproved option holders but not a new tax advantage. Options can be exercised and shares sold through a trading event in the usual way, and the stamp duty exemption reduces transaction costs, but the underlying tax treatment is unchanged.
The more significant PISCES consideration for unapproved options is the readily convertible assets question.
As set out on our PISCES and tax page, shares capable of being traded on a PISCES platform are treated as RCAs from the point PISCES participation is anticipated, meaning PAYE and employer NIC apply on exercise even before a trading event takes place.
For companies with significant unapproved option arrangements, this is worth working through carefully before announcing participation.
4. SIP
Share Incentive Plans (SIP) are all-employee schemes that allow companies to give or sell shares to employees in a tax-efficient way.
Unlike EMI and CSOP, SIPs involve actual shares rather than options, employees acquire shares directly, which are held in trust for a minimum period.
The PISCES interaction with SIPs is less direct. The government's legislation to allow PISCES as a specified exercise event applies specifically to EMI and CSOP option agreements but it does not extend to SIP arrangements, which do not involve options in the same sense.
Where SIP participants hold shares that have come out of the plan trust after the required holding period, those shares are held in the ordinary way and can, in principle, be sold through a PISCES trading event if the individual is an eligible participant.
However, the specific tax protections associated with SIP shares apply to the acquisition of shares within the plan, not to the mechanics of a subsequent sale. The normal CGT rules apply to any gain on disposal.
The government published a summary of responses to its Call for Evidence on SIP and SAYE at Autumn Budget 2025, but no specific PISCES integration measures for SIP were announced.
Companies running SIPs who are considering PISCES participation should take advice on how the two work together in their specific circumstances.
5. SAYE
Save As You Earn (SAYE) is an all-employee scheme allowing employees to save a fixed monthly amount over three or five years and use the proceeds to buy shares at a discounted price set at the outset.
Like SIP, it is non-discretionary and must be offered to all eligible employees on the same terms.
The PISCES legislation focuses specifically on EMI and CSOP.
SAYE options can ordinarily only be exercised at the end of the savings period or on specified events such as leaving employment or a takeover, and a PISCES trading window is not currently one of these events, and adding it would require statutory change that has not been made for SAYE.
Employees who have completed a SAYE scheme and hold shares after exercising can, in principle, sell those shares through a PISCES trading event as an eligible participant, but the scheme mechanics themselves do not connect with PISCES in the way that EMI and CSOP now do.
Getting your schemes PISCES-ready
The interaction between PISCES and the UK's share schemes is genuinely complex, particularly for companies with existing EMI or CSOP arrangements that need amending, or those navigating the RCA implications of unapproved options.
Getting the documentation right, keeping valuations current, and ensuring option agreements are structured correctly from the outset are all things that matter before a trading event is announced, not after.
Vestd manages the full lifecycle of a company's share schemes from cap tables, valuations, and option agreements, to the records that underpin a well-run PISCES event (which you can also organise on Vestd). If you want to understand where your schemes stand and what needs to change, book a call with our team.
This is not an offer or invitation to invest. Any future investment opportunities will be subject to eligibility and regulatory checks, including verification of investor status. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.