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CSOPS ― qualifying conditions for companies

Produced by Tolley in association with
Employment Tax
Guidance

CSOPS ― qualifying conditions for companies

Produced by Tolley in association with
Employment Tax
Guidance
imgtext

From a corporate perspective, the qualifying conditions for 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 makes no difference at all.

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 that wish to invite their employees to participate.

For these purposes, control is defined by ITA 2007, s 995. As a general

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Ken Moody
Ken Moody

Tax Consultant at KM Tax Consultant 


Ken Moody CTA (Fellow), ATT has worked in tax for over 40 years. He qualified as an Associate of the Chartered Institute of Taxation (CIOT) while working for a local firm of Chartered Accountants in his home town Sheffield. Ken then joined a top 30 London firm, managing the tax affairs of a SE-quoted group of companies. As lead tax adviser, this involved complex technical negotiations with HMRC, briefing and meeting with Tax Counsel, group tax planning and advice on corporate transactions. Following a takeover, Ken took on a similar role in Saffery Champness' London office. Since 1995, Ken has worked for firms in the North of England and Scotland, in mainly advisory roles, focussing on the holistic tax affairs of owner-managed businesses (OMBs) and their proprietors. Ken now works as an independent tax consultant advising a number of professional firms of accountants around the North West, where he is based, but also offering nationwide support. Still with an OMB focus, Ken advises across a broad range of UK direct tax issues. Ken's writing career began with articles in Taxation and Tax Journal from about 2000 onwards and in writing in-house tax publications for DTE in Bury, as part of his role as Senior Tax Manager. He has since written numerous articles for professional magazines and other publications. Ken was awarded the Fellowship of the CIOT in 2011 for his work "Employment-Related Securities and Unlisted Companies".

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