Share options are rights to acquire shares which can be exercised when certain conditions have been met (such as the passing of a time period or the occurrence of an event), provided that the option holder pays a specified amount to acquire those shares at that time.
The term 'unapproved option' is used to refer to any share option which was not granted under any of the statutory tax-advantaged option schemes (being a company share option plan (CSOP) or enterprise management incentives (EMI) scheme or save as you earn scheme (SAYE)), and originates from when CSOPs and SAYEs had to be formally approved by HMRC before they could receive the associated statutory tax reliefs. For now, the term continues to be used—despite the fact that, since April 2014, it is no longer necessary to obtain HMRC approval to any statutory tax-advantaged scheme. However, the term ‘non-tax advantaged options’ is also increasingly being used in place of ‘unapproved options’.
Unapproved options are the most widely used form of employee share incentive. They offer flexibility for a company as they can be designed
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