How CSOPs work and key features
How CSOPs work and key features

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • How CSOPs work and key features
  • What are CSOPs?
  • The law governing CSOP options
  • Eligibility requirements
  • Which shares can CSOP options be granted over?
  • Who can be granted CSOP options
  • What must the exercise price be?
  • Are there any limits on the grant of CSOP options?
  • CSOPs and group companies
  • When can CSOP options be exercised?
  • More...

This Practice Note covers the following topics in high level detail:

  1. what are CSOPs?

  2. the law governing CSOP options

  3. the eligibility requirements:

    1. which shares can CSOP options be granted over?

    2. who can be granted CSOP options?

    3. what must the exercise price be?

    4. are there any limits on the grant of CSOP options?

  4. CSOPs and group companies

  5. when can CSOP options be exercised?

  6. when do CSOP options lapse?

  7. are there any restrictions in regard to the terms of a CSOP?

  8. amending the terms of an CSOP option

  9. tax treatment of CSOP options

    1. income tax and National Insurance Contributions (NICs) treatment

    1. CGT treatment

  10. exchange (rollover) of CSOP options

  11. valuation of CSOP options

  12. HMRC self-certification requirements

  13. annual returns, and

  14. CSOP options and corporate transactions

For further more detailed information on CSOPs, see Practice Notes:

  1. CSOP—qualifying companies and qualifying shares

  2. Who can be granted a CSOP option?

  3. CSOP—when can the options be exercised?

  4. CSOP—self certification, registration and filing requirements

  5. CSOP—requirements for the options: performance conditions

  6. CSOP valuations

  7. CSOP—exchange of share options (rollover)

  8. CSOP—income tax and NIC treatment of options, and

  9. CSOP—CGT treatment and corporation tax treatment

What are CSOPs?

Company share option plans (CSOPs) are discretionary share option schemes which can be operated on an all employee basis but which are usually used on a selective basis.

If the statutory provisions are met, favourable treatment can result.

Options can be awarded over

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