CSOP

In this lesson

1. 0:00 Company Share Option Plan Overview
2. 0:16 Eligibility and Maximum Grant Value
3. 1:13 Exercise Period and Option Pricing
4. 2:13 Tax Treatment of CSOP Shares

About this lesson

You'll discover the eligibility criteria (employees owning 30% or less of shares), the current £60,000 maximum grant value per employee, and how the three to ten-year exercise period works to keep employees committed to the business. The video covers the mechanics of how CSOP operates in practice. The option price is set at market value on the grant date, meaning employees can't receive a discount upfront but benefit if company value grows over the three-year vesting period. Crucially, there's no income tax when options are granted or exercised, making CSOP highly tax-efficient compared to other remuneration methods. You'll also understand the capital gains tax implications when employees eventually sell their shares, and how they can use their annual CGT exemption to manage their tax liability strategically. This is essential knowledge for the Taxation papers, where employee share schemes feature regularly in exam questions and case studies.

Duration: 3m