Company share option plans (CSOPs)

Can this be split

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A US parent company with UK subsdidairy.  The US company has give share options to the UK employees

The Value of the Share options upon grant will exceed £60,000.  I do not think it is possible to split the Share Options between CSOPS (upto £60,000) and the rest under Uanpproved Share Option Scheme ?

Also assuming the shares options are under an Unapproved Share Option Scheme any income tax paid on exercise of the share options (its not Readily Convertible Asset) would be offset in the CGT calculation upon Sale of the Shares ? If thats the case assuming would there be any tax saving when comparing a Unapprove Share option Scheme with an approved share option scheme ?


Replies (4)

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By nrw2
27th Feb 2024 16:14

Yes, each employee can be granted CSOP options up to the limit with the balance granted as unapproved options.

Under the unapproved scheme the base cost (= exercise price) would be deducted from the sale price in determining the taxable profit for CGT purposes, rather than the income tax paid on exercise. A CSOP scheme is therefore definitely more tax efficient than an unapproved scheme (otherwise there would be little point in the tax advantaged CSOP!).

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By Tasnim Mustafa
27th Feb 2024 16:24

Why not utilise an EMI option scheme? This would still work with a US head co and UK subsidiary. We can help out if you need!

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Replying to TasnimMustafa:
By nrw2
27th Feb 2024 16:34

I'd assumed this wasn't EMI eligible (eg too large) based on the question, but agreed if it's still EMI eligible then that's the way to go - beats CSOP!

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Replying to nrw2:
By JimLittle
28th Feb 2024 09:19

Yes correct the group is considered to be large as it has more than 250 employees

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