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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): Supplementary and defined terms: Group schemes

Schedule 4 CSOP schemes can be extended to include subsidiary companies under the control of the company which established the scheme. These are known as ‘group schemes’. There is no statutory authority for extending a scheme to other companies (CIR v Reed International plc see ETASSUM47270). The Schedule 4 CSOP scheme organiser company and nominated subsidiaries are referred to as ‘constituent companies’ (paragraph 3(3)).

A list of the constituent companies should be included in the scheme documents. Records of any subsequent additions or withdrawals should be maintained by the scheme organiser, however there is no need to advise ESSU of these changes either at the time of the change or by means of the annual return.

A company’s introduction as a constituent company in a group scheme cannot be backdated to a date before it was formally admitted.

A Schedule 4 CSOP scheme which is established by a company which is itself a subsidiary company, cannot include as constituent companies its own parent company or fellow subsidiaries.

‘Control’ has the meaning given in Section 719 ITEPA and will normally include companies in which the grantor owns more than 50% of the shares. It will also be acceptable for schemes to define subsidiary companies by reference to Section 1159 of the Companies Act 2006.