Part 7F3Employment income: income and exemptions relating to securities
Chapter 8Approved CSOP schemes
Tax advantages
524No charge in respect of receipt of option
1
No liability to income tax arises in respect of the exercise of the share option if—
a
the individual exercises it in accordance with the provisions of the CSOP scheme at a time when the scheme is approved, and
F2b
Condition A or B is met.
F12
Condition A is that the option is exercised—
a
on or after the third anniversary of the date on which it was granted, but
b
not later than the tenth anniversary of that date.
2A
Condition B is that the option—
a
is exercised before the third anniversary of the date on which it was granted, and
b
is so exercised by virtue of a provision included in the scheme under paragraph 24 of Schedule 4 (exercise of options after ceasing to be director or employee) in circumstances in which subsection (2B) applies.
2B
This subsection applies if the individual exercising the option—
a
has ceased to be a full-time director or qualifying employee of the scheme organiser (or, in the case of a group scheme, a constituent company) because of injury, disability, redundancy or retirement, and
b
exercises the option within 6 months of the day on which he ceases to be such a director or employee.
2C
In subsection (2B)—
“redundancy” means redundancy within the meaning of ERA 1996 or ER(NI)O 1996, and
“retirement” means retirement on or after reaching a retirement age specified in the scheme.
F13
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F44
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5
Paragraph 25 of Schedule 4 provides for the exercise of an option where the holder has died.
Pt. 7 heading substituted (with effect in accordance with Sch. 22 para. 2(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 2(1)