CSOP—eligibility requirements and self-certification process

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 and the CSOP is correctly notified to HMRC, favourable tax treatment can result.

CSOP options can be awarded over the shares of UK private, public or listed companies, and also over the shares of foreign parent companies, subject to statutory requirements.

Each employee can receive CSOP options to buy company shares worth up to £60,000 (with effect from 6 April 2023; previously £30,000), as valued (ignoring any restrictions) at the date of grant or such earlier agreed time.

The CSOP regime sets out numerous requirements that must be met, including in relation to:

1. •

   the employees that are being granted the options

2. •

   the shares being placed under option, and

3. •

   the exercise price

This subtopic provides a detailed analysis of the CSOP qualifying criteria and practical issues in relation to the introduction and ongoing operation of CSOPs, including details of the regime under which it is necessary to self-certify