CSOP—tax treatment

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.

Pursuant to a CSOP, each employee can receive share 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.

This subtopic comprises of notes detailing:

1. •

   the income tax and National Insurance contributions (NICs) treatment of CSOP options, and

2. •

   the capital gains tax (CGT) treatment of CSOP options and the availability of a corporation tax deduction for the employer