The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Options issued under a company share option plan (CSOP) provide employees with a right to acquire shares at a set point in the future for their market value as at the date of grant of the option. Provided that certain qualifying criteria are met throughout the period from grant to exercise, no income tax or Class 1 national insurance contributions (NIC) arise on the exercise of the options and instead any gains on sale of the shares are chargeable to capital gains tax (CGT).
A number of changes were made to CSOP by FA 2013 and FA 2014 to simplify the administration of the scheme and harmonise some of the rules with that of other tax-advantaged schemes. One of these changes means that from 6 April 2014 a qualifying CSOP is known as a ‘Schedule 4 CSOP scheme’.
A Schedule 4 CSOP scheme is a tax-advantaged share option scheme which means that, provided certain criteria are met, HMRC allows preferential tax treatment for the employee when compared with non tax-advantaged share option schemes (formerly known as ‘unapproved’ schemes).
Provided the employee and the company continue to meet the relevant qualifying conditions for the Schedule 4 CSOP scheme and the employees exercise their options at least three years after the date of grant (or, if they exercise earlier, by reason of ill-health, disability, redundancy or retirement), no income tax or NIC is payable on the exercise of the option.
Sales of shares acquired through a Schedule 4 CSOP scheme are subject to CGT. This is in comparison to income tax and NIC, chargeable at higher rates than CGT, on any option gains under a non tax-advantaged plan.
Where overseas companies operate home country share plans with UK resident participants it may be possible to implement a Schedule 4 CSOP scheme in the UK as a sub-plan. This may afford participating UK employees significant tax benefits without the need to make any amendments to the terms of
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
The majority of state benefits (also called social security benefits) are managed by the Department of Work and Pensions (DWP) via the Jobcentre Plus.Some benefits are dependent on a national insurance contribution record (and different classes of national insurance provide different benefit
Expenditure of a capital nature is not allowed as a deduction when calculating trading profits. Expenditure of a revenue nature is allowable, provided there is no specific statutory rule prohibiting a deduction and the expenditure also satisfies the wholly and exclusively test. See the Wholly and
This guidance note provides an overview of what conditions need to be met before a business is entitled to treat VAT incurred as input tax. This note should be read in conjunction with the other notes in the ‘Claiming input tax’ subtopic. For a flowchart outlining the procedure for claiming input
Class 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met before Class 1A NIC is
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.