Part 7Employment income: share-related income and exemptions
Chapter 8Approved CSOP schemes
Tax advantages
524No charge in respect of receipt of option
1
No liability to income tax arises in respect of the exercise of the share option if—
a
the individual exercises it in accordance with the provisions of the CSOP scheme at a time when the scheme is approved, and
b
the condition in subsection (2) is met.
2
The condition is that—
a
the option (“the current option”) is exercised—
i
on or after the third anniversary of the date on which it was granted, but
ii
not later than the tenth anniversary of that date, and
b
the individual has not made an exempt exercise of another option within the period of 3 years ending with the date on which the current option is exercised.
3
For the purposes of subsection (2)—
a
an individual has made an exempt exercise of another option if the individual has exercised a share option granted under the scheme, or under any other approved CSOP scheme, in circumstances in which subsection (1) applied to its exercise, and
b
an option exercised on the same day as the current option is to be disregarded.
4
This section does not affect the operation of section 477(4) (no charge on exercise of option by personal representatives etc.).
5
Paragraph 25 of Schedule 4 provides for the exercise of an option where the holder has died.