This scheme can be used to give options to employees to buy shares in their employing company. Typically the options must not be exercised within 3 years of grant in order to qualify as CSOP options, and in order for their to be no PAYE charge the exercise price must be no less than the market value at the date of grant.
- Using the figures above, you might grant options now that allow the employee to buy shares at £0.40 (today’s value) in 3 years time (when the shares are worth, say, £1).
- The EMI entrepreneurs’ relief concessions do not apply to CSOP schemes, so to qualify for ER the employee would have to exercise, then for at least 12 months (and at the date of sale) hold at least 5% of the share capital and be an officer or employee.
The cumulative value of options granted to an employee must not exceed £30,000 (£60,000 from April 2023) at the date of grant.