ETASSUM41190 - Schedule 4 Company Share Option Plan (CSOP): General: Foreign currency shares

The market value (MV) of a share under option is calculated when the option is granted. It is not recalculated at current values when later grants take place. If an option is granted with the exercise price denominated in a currency other than pounds sterling, then it needs to be converted into pounds sterling at the exchange rate prevailing on the date of grant (or such other date that HMRC has agreed can be used to determine the exercise price) in order to ensure that the £60,000 limit (£30,000 limit for options granted prior to 6 April 2023) is not exceeded, an example of such a calculation is provided for guidance.

Example – scheme limit calculation for foreign currency shares

1/1/2014

  • 10,000 shares at $4 per share when exchange rate is £1 equals $2
  • Total MV in £ equals 10,000 multiplied by $4 divided by 2 equals £20,000

1/1/2015

  • 5,000 shares at $5 per share when exchange rate is £1 equals $3
  • Total MV in £ equals 5,000 multiplied by $5 divided by 3 equals £8,333
  • Total MV of all tax advantaged options equals £28,333

If the market value of an option is converted, at the date of grant, to sterling from another currency for the purpose of deciding whether it is within the paragraph 6 limits when it is granted, it is not recalculated at the exchange rates current at the time of a subsequent grant.