Chancellor to make investing in private companies and selling shares acquired through options easier

After several years of consultation the Government is now proceeding with the launch of the PISCES trading platform this Spring.

PISCES stands for Private Intermittent Securities & Capital Exchange Systems and is a new UK regulated trading platform that will facilitate the intermittent trading of existing shares in private companies.

In essence, it enables private companies to trade their shares with investors without needing a full public listing.

Impact on EMIs and CSOPs

In Rachel Reeves’ Spring Statement 2025 she addressed the share scheme and tax implications of the new PISCES regime.

The Enterprise Management Incentives (EMI) scheme is a tax advantaged employee share option typically for smaller companies (with no more £30m in gross assets). The Company Share Option Plan (CSOP) is also a tax advantaged share scheme generally for larger companies and with a minimum three year period before option exercise.

New Schemes

The Government has announced that for new EMI/CSOP Schemes the PISCES platform can be used in connection with share option exercises, so that it can allow optionholders to sell their shares to others wishing to invest. It is important that the Plan Rules or option agreement detail from the outset that a PISCES trading window is a specified event that will allow the options to be exercised.

Existing Schemes

However, for existing EMI/CSOP options it has been confirmed that options cannot be amended retrospectively to include a PISCES trading window as a specified exercise event. If it were amended in this way it would be a change to a fundamental term of the option and have adverse tax consequences.

In addition, existing schemes cannot use a discretion clause to allow options to be exercised on a PISCES trading window and retain their tax advantages.

The Government have said they will continue to keep the position of existing EMI/CSOP options under review.

Readily convertible assets (RCAs)

Commonly, where an employee of a private company exercises a share option they will pay any income tax due (usually if the options are not tax-advantages of if they are EMI options granted at a discount to market value) through their Self Assessment Tax Return and no National Insurance Contributions (NICs) will apply.

However, the Government have now confirmed that when the plan documentation allows for an option exercise to be traded through PISCES those shares will be treated as convertible into cash (Readily Convertible Assets, RCAs) This means that PAYE and NICs will apply, in effect the tax has to be paid under PAYE within one month of exercise.

This tax treatment will apply even if PISCES is not actually used for the option exercise.

Stamp Duty

Normally, when shares are sold following an option exercise the purchaser will have to pay stamp duty at 0.5% on the purchase price. The Government is consulting on the stamp duty position on PISCES traded shares, but their current intention is that PISCES traded shares will be exempt from all stamp duties.

Share Valuation

HMRC considers that the normal principles of share valuation will continue to apply in the context of the grant of EMI and CSOP options where PISCES applies.

In conclusion

In conclusion, the PISCES trading platform gives extra flexibility and opportunities for employees looking to exercise options and realise value in private companies.