Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Share option definition

What does Share option mean? A share option is a contractual right to buy (and less commonly to sell) shares at a fixed or formula-based exercise price within a stated period or on specified events. In practice it is a call option over shares, granted either by the company (over unissued shares) or by an existing shareholder (over issued shares). The option gives the holder a right, not an obligation, to acquire the shares; if not exercised before expiry it lapses. The term is descriptive rather than defined in statute or case law, although particular employee share option schemes are defined for tax...

Amending UK tax-advantaged share options (EMI, CSOP, SAYE): preserving relief; HMRC self-certification, discretion, performance conditions, PISCES triggers, error notifications and rollovers

Published by a LexisNexis Share Incentives expert

Practice notes

UK tax-advantaged share options

UK tax-advantaged share options are issued under written agreements that meet the statutory conditions set out in Part 7 and the pertinent Schedules of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) legislation. To secure the favourable tax treatment available, those arrangements must fully align with, and continue to satisfy, the applicable provisions of ITEPA 2003 throughout.

The main categories of tax-advantaged share option plans are as follows:

enterprise management incentives (EMI) schemes
company share option plans (CSOPs)
save as you earn (SAYE) schemes

There are occasions, from time to time, when a company (or the option holder) may look at varying options that have already been granted and are in place. These may include, without limitation, situations where:

the option has been drafted to lapse in specified scenarios (eg where the option holder leaves employment with the company for a particular reason, or the performance conditions attached to the option have become impossible to achieve)...

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Michael Carter

Osborne Clarke

Michael heads Osborne Clarke's UK Incentives team and has more than 20 years' experience of working with listed, private and global companies. He advises on all aspects of employee remuneration, with a particular focus on the design, drafting and implementation of share and cash incentive plans for both executives and all employees. Michael is ranked as a leading lawyer in his field in Chambers & Partners and was also listed as a 'Best Client Partner 2014' in a survey of FTSE 100 General Counsel for client service and satisfaction. Michael joined Osborne Clarke in November 2016 from Addleshaw Goddard, where he was head of their employee incentives group and, prior to that, a partner and head of the executive compensation practice at a Big Four accountancy firm. 'Michael is very approachable, obviously knowledgeable and attentive [and] feels like a member of our team.'...

Mairi Granville-George

Osborne Clarke

Mairi is the specialist Knowledge Lawyer Director for Osborne Clarke's employee incentives team.Mairi is responsible for keeping lawyers and clients up-to-date on developments in share schemes and executive remuneration. This includes publishing a regular incentives newsletter and responding to relevant consultations issued by HMRC and the Treasury. Osborne Clarke's incentives team advises on the design and implementation of the full range of employee share plans and employee benefit trusts (including employee ownership trusts).Mairi has particular expertise in tax-advantaged share plans, including enterprise management incentive options, and is a member of Share Plan Lawyers....

Web page updated on 21/05/2026

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