CSOPS ― qualifying conditions for companies

Produced by Tolley in association with

Employment Tax

Guidance

From a corporate perspective, the qualifying conditions for company share option plans (CSOPs) are relatively relaxed. There are no restrictions on the gross assets of the company or group, nor on the number of employees that are able to work for them. Similarly, the type of business they operate does not need to be checked against a list of excluded trades.

In other words, any company that wishes to do so, with the notable exception of a subsidiary company whose shares are not listed, is able to implement and benefit from the use of a CSOP.

HMRC guidance on general requirements which must be met is at ETASSUM41000 onwards.

Qualifying company or group

Either a single company or a group can operate a CSOP. In a group situation, the main point to be satisfied is that the company which has established the scheme, and over whose shares options are to be granted, must have control either directly or indirectly over any subsidiaries whose employees will be invited to participate,

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Helen Wood

Founder, HLN WD TX , Employment Tax

Helen Wood is the founder of HLN WD TX, a share schemes and employee incentives advisory business.She qualified as a CA with ICAS in 2009 and has worked as a specialist reward and incentives advisor for 17 years, spending 13 of those at KPMG followed by 3 ½ years as an Associate Director at RSM. Helen has worked with businesses ranging from start-ups to fully listed companies, spanning owner-managed businesses, private equity portfolio companies, and AIM listed businesses.She advises on a wide range of employee share schemes and employment related securities matters including the design and implementation of effective management and employee incentives; tax valuation of employment related securities, buy and sell side transaction support, HMRC compliance, tax due diligence and employee ownership trust transactions.

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