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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Schedule 4 Company Share Option Plan (CSOP): Shares to be used: Employee control shares

Shares of a particular class are only “employee-control” shares, as defined in paragraph 20(2), if they are held by:

  • employees or directors (or former employees or directors) of the company concerned, or of a company under its control,
  • who, by virtue of their holding of shares of that class, are able to control the company.

The reference in paragraph 20(2) to “persons” includes a singular “person”.

Control for the purpose of paragraph 20(2), as for paragraphs 16 and 17, has the meaning given by Section 995 ITA 2007. This means having the power to secure that the affairs of the company are conducted in accordance with that person’s wishes (see ETASSUM43140).

Non-voting shares will not be “employee-control” shares as they will not, by themselves, enable their holders to control a company.