Jurisdiction(s):
United Kingdom

UK CSOP share valuations: HMRC requirements on exercise price, £60,000 individual limit, pre-grant pricing, flotations, adjustments, rollovers and valuation methods (listed, unquoted, AIM, PISCES)

Published by a LexisNexis Share Incentives expert

Practice notes

Why do you need to obtain a CSOP valuation?

When granting a company share option plan (CSOP) option, you must determine the market value of the underlying shares to ensure that:

the exercise price complies with CSOP statutory rules, meaning it is not manifestly below their market value (disregarding any restrictions) at the grant date, or at an earlier point agreed with an HMRC officer—for more detail, see The CSOP exercise price below
the CSOP maximum individual limit is not breached, which restricts any person to holding no more than £60,000 of unexercised qualifying CSOP options—for how this is worked out, see The CSOP individual limit below

In addition, once a CSOP option has been granted, the shares’ market value may still be relevant where:

the exercise price fails to satisfy the above requirements (which may give rise to tax—see Practice Note: CSOP—income tax and NICs treatment of options—Income tax and NICs on the grant of CSOP options)
the option is exercised in particular circumstances, so that any tax implications can be quantified

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Web page updated on 22/05/2026

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