A Company Share Option Plan is an HMRC-approved discretionary scheme allowing employees to buy up to £60,000 worth of shares at a fixed price, with no income tax at exercise if held for 3 years.

What is the CSOP limit?

From April 2023 the CSOP individual limit doubled to £60,000 (previously £30,000). Options are valued at grant and must be at market value — you cannot grant below-market-value CSOP options.

Is there income tax on CSOP exercise?

No income tax or NIC if you exercise between 3 and 10 years after grant and have not left employment (subject to qualifying conditions). Only CGT applies on sale.

How does CSOP differ from EMI?

EMI is better for qualifying SMEs (larger individual limit, BADR eligible). CSOP is available to any UK company (including large companies) but has a lower individual limit (£60K) and no BADR.

What CGT rates apply to CSOP shares?

18% for basic rate taxpayers, 24% for higher/additional rate taxpayers on gains above the £3,000 annual exempt amount. BADR does not apply to CSOP shares.

Can you exercise CSOP options early?

Early exercise (before 3 years) normally triggers income tax and NIC on the gain. Exceptions include death, ill health, redundancy, or a company takeover — these count as qualifying events allowing early exercise.

How many employees can get CSOP options?

Any number — CSOP is discretionary so the company chooses who receives options. There is no minimum participation requirement unlike SIP or SAYE.

Can a company listed on AIM offer CSOP?

Yes. AIM-listed companies can use CSOP. The key restriction is that CSOPs cannot be granted to employees who hold 30%+ of a close company's shares.

What happens to CSOP on leaving employment?

Most plans allow exercise within 6 months of leaving for 'good leaver' reasons (redundancy, retirement, ill health). Exercise will be income tax free if the 3-year period has been met.

Does the £60,000 CSOP limit include vested options?

The £60,000 limit applies to the market value of options at the time of grant, not the number of vested options. Options that have already been exercised do not count towards the limit.

Is there employer NIC saving on CSOP?

Yes — because there is no income tax on qualifying exercise, the employer also saves employer NIC (15% from April 2025) on the gain. This makes CSOP very cost-effective for employers too.

How is CSOP reported to HMRC?

The company must register the CSOP online and file an annual employment-related securities (ERS) return. Employees report gains on disposal in their Self Assessment return.

CSOP Company Share Option Calculator

Calculate income tax saving and CGT on CSOP options

CSOP Calculator

Number of Options

Exercise Price (£/share)

Sale Price (£/share)

Income Tax Rate (if unapproved)

CGT Rate

CSOP vs Unapproved Options

The key advantage of CSOP is that qualifying exercise triggers no income tax — unlike unapproved options where the full gain at exercise is treated as employment income taxed at up to 45%. With CSOP, only CGT applies when shares are sold.

Frequently Asked Questions

What is the 2026 CSOP individual limit?

Does CSOP qualify for Business Asset Disposal Relief?