Company Share Option Plan (CSOP)

Frequently asked questions

• What is a Company Share Option Plan (CSOP)?

  A CSOP, standing for Company Share Option Plan, is a UK-specific scheme that offers employees the option to buy shares in their company at a set price.

  This is often used as an incentive for employees. Company share option plan examples include businesses looking for flexible schemes in addition, or instead of, the EMI scheme, unapproved options and growth shares.

• What is a CSOP approved by HMRC?

  A CSOP approved by HMRC means that the scheme adheres to specific guidelines set by Her Majesty's Revenue and Customs. This ensures that the company share option plan HMRC guidelines are met, offering tax advantages to both employers and employees.

• What is the CSOP limit in the UK?

  The company share option plan limit, as of 2023/2024, is currently £60,000 per recipient, based on the unrestricted market value (UMV) at the time of each grant.

• How do company share options work?

  Company share options allow employees to buy shares at a predetermined price. When the value of the company increases, employees can benefit from the difference between the market price and the option price. If you’re looking for a company share option plan explained in detail, check out our above examples.

• What are CSOP options for HMRC?

  CSOP options for HMRC refer to the specific guidelines and criteria that a CSOP must meet to gain HMRC approval. This approval ensures that the scheme is eligible for tax advantages under company share option plan UK tax regulations.

• What are the tax advantages of CSOP?

  CSOPs offer various tax advantages, including potential exemptions from income tax and National Insurance on the difference between the option price and the market value.