(CSOP) International Considerations for Employers
Establishing a Scheme
There are a number of ways in which companies with overseas parent companies can establish an Approved CSOP. These include;
- An overseas company establishing an approved CSOP for the employees of a UK based branch.
- A UK subsidiary company may also establish a plan that uitilises the shares of an overseas parent company, or
- A UK subsidiary may establish its own plan using its own shares where the overseas parent company is listed on a recognised stock exchange
These schemes can either be a stand alone scheme or alternatively it can take the form of an annex to an overseas plan
For details on how to go about obtaining formal approval.
Tax consequences
Options can be granted to internationally mobile employees. The UK tax treatment of such options in the hands of the employee depends on whether the conditions for income tax relief have been followed.
There will normally be UK income tax implications only if the employee was resident in the UK at the date of grant, or the option was granted in respect of duties carried out in the UK. Further guidance on the taxation of Share Options for Internationally Mobile Employees.
NIC
No NIC liability arises where there is a non-qualifying exercise of an option granted under a CSOP.
For more information on NICs.
Capital gains tax may arise where employees are either resident or ordinarily resident in the UK at the date of disposal or if they were within the scope of the temporary non-residents rules contained in Section 10, Taxation of Chargeable Gains Act (TCGA) 1992.
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