Comparison between the EMI and CSOP tax favoured share schemes

Scheme / FeaturesEnterprise Management Incentives (EMI)Company Share Ownership Plan (CSOP)
Employee eligibilityWorking time commitment 25 hours per week or 75% of their working time (if less)Full time working director (25 hours per week) or an employee with no working time requirement.
Limits – employeesMust not hold more than 30% of the share capital prior to grant.Must not hold, or have control over more than 30% of the share capital prior to grant. Shares under option have to be included when calculating the %age.
Limits – CompanyGross assets of less than £30mNo Asset limit
Grant priceGreater than or equal to market value at date of grantGreater than or equal to market value at date of grant
Market value of optionsCannot exceed £250,000 at date of grantCannot exceed £30,000 at date of grant
Performance conditions and special eventsExercise can be dependent on the satisfaction of performance conditions or a special event – e.g. a sale of the majority interest.Exercise can be dependent on the satisfaction of performance conditions or a special event – e.g. a sale of the majority interest.
Income Tax and NIC on GrantNoNo
Maximum exercise period to retain tax favoured treatmentTen YearsTen Years
Immediate Exercise after Grant providing the options have “vested”YesNo – cannot exercise before third anniversary of date of grant (subject to some specific early exercise opportunities) to retain favoured tax status
Early exerciseAt the discretion of the BoardA “good leaver” may exercise within the three year period.
A cash sale of the business may allow an early exercise too.
Income Tax and NIC on exerciseNoNo
Tax on saleCapital Gains TaxCapital Gains Tax
Entrepreneurs relief availableYes for any size of holdingYes if holding is greater than 5%
LapsingOn leaving employment – to the extent not vestedWithin 12 months of death. There is no requirement for the option holder to be an employee at the time of exercise.
RegistrationOnline Scheme registration
Options to be restored online within 92 days of grant.
Plan and Options to be registered by 6th July in year following date of grant.