SVM110020 - Tax Advantaged Share Schemes: Company share option plans (CSOP)

These schemes were previously called approved discretionary or executive share option schemes. They are now described as company share option plans. A company operating a CSOP may grant an option to acquire shares to any of its employees or full-time directors.

The price at which the options allow the shares to be purchased is the market value of the shares at the time the option is granted.

Market value is computed in accordance with the normal CGT basis at the date of grant (or such earlier date as the rules allow). 

You should ensure that the value proposed is not manifestly less than market value and for the purposes of CSOP, the market value of the shares subject to a restriction is to be determined as if they were not subject to the restriction i.e. Unrestricted Market Value (UMV).

Changes to the CSOP share options limit and share class restrictions took effect from 6 April 2023. Prior to this date: 

• an individual could not hold options to acquire shares valued at more than £30,000, determined at the point each option was granted.  
• shares included in a CSOP scheme had to be class of shares that was ‘worth having’. 

With effect from 6 April 2023, the limit increased to £60,000 and the shares “worth having” rule was removed.   

The changes took effect automatically from 6 April 2023. Unexercised options granted prior to 6 April 2023 will benefit from the changes to the share options limit and share class restrictions.  

See SVM110050 to see how CSOP interacts with EMI for financial limit purposes. 

CSOP guidance is available in the Employee Share Schemes User Guide at ETASSUM40000.

Additional Guidance: SVM150000