UK tax-advantaged employee share plans

The measure

The government has made two announcements in respect of tax-advantaged share plans.

Reform of Company Share Option Plan (CSOP)

The government had previously announced that it was planning to make changes to the UK CSOP regime (a tax advantaged discretionary share option plan under which market value options over shares worth up to £30,000 can be granted). The government confirmed that the Spring Finance Bill 2023 will amend the CSOP legislation to:

• Double the CSOP limits from options over £30,000 of shares to options over £60,000 of shares;
• Remove the restriction whereby CSOP options could only be granted over certain classes of shares; and
• Allow the £60,000 limit mentioned above to be amended by regulations (rather than primary legislation) 

Call for Evidence on Share Incentive Plan (SIP) and Save as you Earn (SAYE) plans

SIP and SAYE are the all-employee tax advantaged share schemes which are available in the UK. The government has announced a call for evidence in respect of these plans with a view to considering how it can improve and simplify the schemes.

Who will be affected?

Companies operating share plans in the UK or thinking of offering share plans to employees in the UK.

When will the measure come into effect?

The CSOP changes should apply to options granted on or after 6 April 2023.

No timing was specified for the SIP and SAYE call for evidence.