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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: As a director or employee

Paragraph 20(3)(a) refers to shares as being open market shares if the people holding the shares are not persons who acquired their shares “in pursuance of a right conferred on them or an opportunity afforded to them as a director or employee of the scheme organiser or any other company, and not as a result of an offer to the public”. There will only be very limited circumstances where shares acquired by a director or employee were acquired in another capacity.

Section 421B(3) (section 471(3) in relation to securities options) ITEPA deems that securities acquired will be by reason of an employment unless:

  1. the person by whom the right or opportunity is made available is an individual, and
  2. the right or opportunity is made available in the normal course of the domestic, family or personal relationships of that person.