SAYE/CSOP and SIPs

Question 1

When can a company obtain tax relief for SIPs?

3 points

Answer 1

1. Tax relief is available for the cost of providing free/matching shares based on the MV of the shares.
2. Relief is available for shares purchased by employees based on any discount to MV given.
3. Relief for set up costs and running costs.

Question 2

When can a company obtain tax relief/not obtain tax relief for CSOP?

3 points

Answer 2

1. Cost of setting up a CSOP.
2. Expense recognised in the accounts is added back and only recognised when the option is exercised. The relief is the MV of the shares - the exercise price.
3. No relief is available when the share options lapse.

Question 3

Conditions to qualify for relief in realtion to the shares acquired for a CSOP?

Answer 3

1. Shares are ordinary shares that are fully paid up and not redeemable.
2. Shares must be:
   - Listed shares;
   - Shares in a company not under control of another company; or
   - Shares in a company under the control of a listed company.
3. The shares are in:
   - The employing company;
   - The parent of employing company; or
   - Member of a consortium that owns or is in consortium with the employing company.