Comparison between the EMI and CSOP tax favoured share schemes

Scheme / Features	Enterprise Management Incentives (EMI)	Company Share Ownership Plan (CSOP)
Employee eligibility	Working 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 – employees	Must 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 – Company	Gross assets of less than £30m	No Asset limit
Grant price	Greater than or equal to market value at date of grant	Greater than or equal to market value at date of grant
Market value of options	Cannot exceed £250,000 at date of grant	Cannot exceed £60,000 at date of grant – £30,000 pre 6 April 2023
Performance conditions and special events	Exercise 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 Grant	No	No
Maximum exercise period to retain tax favoured treatment	Ten Years	Ten Years
Immediate Exercise after Grant providing the options have “vested”	Yes	No – cannot exercise before third anniversary of date of grant (subject to some specific early exercise opportunities) to retain favoured tax status
Early exercise	At the discretion of the Board	A “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 exercise	No	No
Tax on sale	Capital Gains Tax	Capital Gains Tax
Entrepreneurs relief available	Yes for any size of holding	Yes if holding is greater than 5%
Lapsing	On leaving employment – to the extent not vested	Within 12 months of death. There is no requirement for the option holder to be an employee at the time of exercise.
Registration	Online 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.