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Company Share Option Plan (CSOP)

[ˈkʌmpəni ʃeər ˈɒpʃᵊn plæn (siː-ɛs-əʊ-piː)]



A Company Share Option Plan provides a way of offering tax-free shares to Employees or Company Directors.

More detail:

A Company Share Option Plan (CSOP) allows Employees or Company Directors the opportunity to be offered tax-free shares. Through this scheme, Employees or Company Directors will not have any Income Tax or National Insurance liability on the difference between the price they pay for the shares and the market value of the shares.

A CSOP is more restrictive than a Enterprise Incentive Scheme but it is more accessible for smaller companies. The terms of CSOP require that the Employee or Company Director cannot purchase the shares at a price less than the market value of the shares on the day the option was agreed. There is also a £30,000 limit on value of options that can be held

Capital Gains Tax will apply if shares are sold at a future date and the profits are above the Capital Gains Tax Allowance.

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