CSOP—valuation and compliance

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.

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.

Valuation of CSOP options

A share valuation in respect of CSOP options may be required:

•
to ensure that the exercise price complies with the CSOP legislation stating that the exercise price of the options must be:
1. ◦
  stated at the time of grant, and
2. ◦
  not manifestly less than the market value (ignoring any restrictions) of shares of the same class at the

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