CSOP—basic principles

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.

Options can be awarded over the shares of UK unlisted companies (whether private or public) or listed companies, and also over the shares of foreign parent companies, provided that the relevant statutory requirements are met.

Each employee can receive 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.

This subtopic introduces the concept of a CSOP and examines when