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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Company Share Option Plan (CSOP): Taxation: Disposal of shares – Schedule 4 CSOP schemes

For shares acquired by tax-relieved exercises of Schedule 4 CSOP options Paragraph 13(2) of Schedule 7D TCGA 1992 specifically disapplies Section 17(1) TCGA 1992. This means that in computing a capital gain on subsequent disposal of the shares by the employee the base cost to be deducted from the disposal proceeds is:

  • the actual consideration (if any) given for the grant of the option, plus
  • the actual option exercise price paid when acquiring the shares, plus
  • any amounts charged under section 526 in respect of the grant of a Schedule 4 CSOP option - see ETASSUM48130.


For shares acquired by taxable exercises of share options (for example an option exercised within three years of grant for non good leaver reasons), the CGT base cost will normally be the same as for shares acquired by exercising non tax advantaged options (see ETASSUM48190). The one exception is that if liability arose under Section 526 on the grant of the option, the amount chargeable under Section 476 is reduced by the amount already charged under Section 526 (Section 479(2) & 480(2)).


Further guidance on the CGT consequences for employees share options is at: CG56300.