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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

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HM Revenue & Customs
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Schedule 4 Company Share Option Plan (CSOP): General requirements: Interaction with EMI

Options granted under a Schedule 4 CSOP scheme are regarded as unexercised qualifying options for the purposes of determining the individuals £250,000 financial limit for granting options under the EMI code (refer to ETASSUM51030). For example a Schedule 4 CSOP option that has a total market value (MV) at grant of £30,000 would mean that the maximum unrestricted MV for the grant of a qualifying EMI option would be £220,000 for options granted on or after 16/06/2012 (£90,000 for options granted prior to 16/06/12). 

If the grant of a Schedule 4 CSOP option results in an employee holding unexercised EMI and Schedule 4 CSOP options immediately after the grant of the Schedule 4 CSOP option in respect of shares with a total market value at the date of grant of more than £250,000 (for options granted on or after 16/06/2012, £120,000 for options granted prior to this date), this constitutes a disqualifying event for the purpose of EMI. The CSOP option remains tax advantaged.