Guide to completing Company Share Option Plan (CSOP) annual return attachment

Transcription

1 Guide to completing Company Share Option Plan (CSOP) annual return attachment The company secretary or the person acting as the company secretary must complete an online endof-year return on or before 6 July for each registered and self-certified Schedule 4 CSOP scheme. The CSOP attachment only needs to be completed and then uploaded where there are outstanding qualifying options and there has been CSOP options activity in the tax year. You will need to complete an online nil return if you have registered the scheme online and there are no outstanding qualifying options, or there are outstanding qualifying options but there has been no CSOP options activity in the tax year. Complete only the worksheets that are relevant but upload the whole workbook, including any blank sheets. If you change the structure or formatting of your attachment it will be rejected. If you have created your own CSV files using the HMRC provided technical note, upload each CSV file that contains data relevant to that scheme type. You should complete the attachment to the best of your ability taking reasonable care to provide all the relevant information. You can use the ERS checking service to check your attachment. The checking service will tell you if and where there are any formatting errors in your attachment. You can use the checking service as often as you like. Checking your attachments regularly allows you to identify and correct these errors. This makes it easier to submit your return at the end of the year. The checking service is accessed through view my schemes and arrangements on the online ERS service. General guidance on valuations All values should be entered in pounds sterling and pence and entered to four decimal places. Where necessary, round up figures ending in 5 or more and round down figures ending in 4 or less. Use any reputable currency convertor to convert to pounds sterling if the value is quoted in another currency. There is no change in valuation practice with the introduction of the templates. It is not necessary to have formally agreed the valuation of shares and securities with HM Revenue and Customs (HMRC). However, where shares are not listed on a recognised stock exchange, you may have asked for a valuation from HMRC. If you agreed a valuation with HMRC then provide the reference number on the attachment. If the number is prefixed with CRN do not enter those letters. If you didn t get a valuation you should continue to retain records of how you reasonably established the valuation. Actual Market Value (AMV) AMV is the value of a share or security after taking into account any restrictions or risk of forfeiture.

2 Unrestricted Market Value (UMV) UMV is the value of a share or security ignoring any restrictions or risk of forfeiture. Recognised stock exchange AIM is not a recognised stock exchange. For more information, go to what is a recognised stock exchange and a table of recognised stock exchanges. General guidance on completing the attachment Where a question or column doesn t apply leave the entry blank. Entering N/A or not applicable will result in your attachment being rejected. Where a question or column requires a YES/NO entry, the following formats are acceptable: Yes yes YES No no NO CSOP_OptionsGranted_V3 worksheet Use this worksheet to tell HMRC about any CSOP options you ve granted in the tax year. Question 1: Date of grant (yyyy-mm-dd) Enter the date the CSOP options were granted to the employees. The date will be on the option certificate and it must be within the tax year covered by this return. Question 2: Number of employees granted options Enter the total number of employees granted CSOP options on this grant date. Question 3: Over how many shares in total were CSOP options granted e.g Enter the total number of shares to 2 decimal places and NOT the value of the shares granted under CSOP options on this grant date. Question 4: Unrestricted market value (UMV) of each share used to determine option exercise price e.g Enter the market value of a share ignoring any restrictions or the risk of forfeiture and this should be entered to 4 decimal places. How the option exercise price is to be determined will be explained in the company s CSOP scheme rules. Question 5: Option exercise price per share e.g

3 Enter the price at which the employee was granted the option. It is the price the employee will pay for each share on the exercise of the share option. This should be entered to 4 decimal places. Since Finance Act 2013, CSOP options can be granted over certain restricted shares. In some cases it is possible to have a higher exercise price than the UMV. The exercise price cannot be lower. Question 6: Are the shares under the CSOP option listed on a recognised stock exchange? (yes/no) If no, enter no and go to question 7. If yes, enter yes and go to question 9. AIM is not a recognised stock exchange. For more information, go to what is a recognised stock exchange and a table of recognised stock exchanges. Question 7: If no, was the market value agreed with HMRC? (yes/no) The market value of shares under CSOP options can be agreed with HMRC in advance of the date of grant of options. Enter yes if the market value was agreed in advance and go to question 8. Enter no if it was not agreed in advance and go to question 9. Question 8: If yes, enter the HMRC reference given The HMRC reference will be on the valuation letter sent to you from the Shares and Assets Valuation office. The reference given will normally be your Company Reference Number (CRN). Enter the numbers only from this reference ignoring any letters. Question 9: Using UMV at the time of each relevant grant, does any employee hold unexercised CSOP options over shares totalling more than 30,000 including this grant?(yes/no) Enter yes if an individual holds over the 30,000 limit. Then register a separate non-tax advantaged scheme or arrangement and report the grants over the individual CSOP limit on the other attachment. CSOP_OptionsRCL_V3 worksheet Use this worksheet to tell HMRC about options released (including exchanges), cancelled or lapsed in the tax year. Where an option is released, exchanged, cancelled or lapsed and no consideration was received don t complete this sheet. No information is needed for this event. Question 1: date of event (yyyy-mm-dd)

4 Enter the date the option is released (including exchanges), cancelled or lapsed for a consideration. Question 2: Was money or value received by the option holder or anyone else when the option was released, exchanged, cancelled or lapsed? (yes/no) You should ONLY complete this worksheet if the individual employee or anyone else received money or money s worth when the CSOP options were released (including exchanges), cancelled or lapsed. "Money's worth" means something that is- of direct monetary value to the individual employee or someone else, or capable of being converted into money or something of direct monetary value to the individual employee or someone else. Question 3: If yes, amount or value e.g The amount or value should be to 4 decimal places. Question 4: Employee first name This is the employee s first name. Question 5: Employee second name (if applicable) If the employee s second name is not available or they have no second name, leave blank Question 6: Employee last name This is the employee s last name. Question 7: National Insurance Number (if applicable) If the employee does not have a National Insurance number then leave blank. Question 8: PAYE reference of employing company. Enter the PAYE reference number of the employee s employing company. Question 9: Was PAYE operated? (yes/no) Income tax and NICs will be payable on the amount of money or money s worth received. The income tax and NICs is payable through PAYE. CSOP_OptionsExercised_V3 worksheet Use this to tell HMRC about options exercised in the tax year.

5 Question 1: Date of event (yyyy-mm-dd) Enter the date option was exercised by the employee. Question 2: Employee first name This is the employee s first name. Question 3: Employee second name (if applicable) If the employee s second name is not available, or they have no second name, leave blank Question 4: Employee last name This is the employee s last name. Question 5: National Insurance Number (if applicable) If the employee does not have a National Insurance number then leave blank. Question 6: PAYE reference of employing company Enter the PAYE reference number of the employee s employing company. Question 7: date of grant (yyyy-mm-dd) Enter the date CSOP options were granted to the employees. The date will be on the option certificate. Question 8: Total number of shares employee entitled to on exercise of the option before any cashless exercise or other adjustment e.g Enter the number of securities to 2 decimal places the employee is entitled to acquire from this exercise. This is the gross number of shares ignoring shares withheld to pay for tax and NIC or the exercise price. For example, an employee has options over 200 shares and chooses to exercise the option to acquire 100 shares. Forty of those shares are withheld to pay for the employee s income tax and NIC liability. You enter 100 in this field. Question 9: Are these shares part of the largest class of shares in that company? (yes/no) Some companies create different classes of ordinary share, for example A and B ordinary shares. The largest class of share is the class of shares with entitlement to the largest proportion of value ( ) on a winding-up. If you only have one class of share, enter yes. If you have more than one class of shares and they are equal in value enter yes.

6 Question 10: Are the shares subject to the option listed on recognised stock exchange? (yes/no) AIM is not a recognised stock exchange. For more information, go to what is a recognised stock exchange and a table of recognised stock exchanges. Question 11: Actual market value (AMV) of a share on the date of exercise e.g AMV is the value of a share or security after taking into account any restrictions or risk of forfeiture and should be entered to 4 decimal places. Question 12: Exercise price per share e.g Enter the price at which the employee was granted the option. It is the price the employee will pay for each share on the exercise of the share option. This should be entered to 4 decimal places. Question 13: Unrestricted market value (UMV) of a share on the date of exercise e.g Enter the market value of a share ignoring any restrictions or the risk of forfeiture to 4 decimal places. Question 14: If the answer to question 10 is no, was the market value agreed with HMRC? (yes/no) If yes go to question 15. If no go to question 16. Question 15: If yes enter the HMRC reference given. The HMRC reference will be on the valuation letter sent to you from the Shares and Assets Valuation office. The reference given will normally be your Company Reference Number (CRN). Enter the numbers only from this reference ignoring any letters. Question 16: Does the exercise qualify for tax relief? (yes/no) The answer will be yes if the option is exercised: between the third and tenth anniversary of the date of grant by a good leaver, subject to the scheme rules, before the third anniversary of the date of grant Question 17: Was PAYE operated? (yes/no) PAYE should have been operated if the shares are readily convertible into cash. There are exceptions e.g. where the employee left employment because of injury, disability or redundancy.

7 If no, go to question 20. Question 18: If yes deductible amount e.g Enter the total amount of: any amount paid for the grant of the option any expenses incurred for the acquisition of the securities Don t include exercise price also often referred to as grant or strike price any expenses in connection with the sale or disposal of the securities any Employers NIC the employee may have agreed to pay under a joint NIC Agreement or Election income tax Question 19: Has a National Insurance Contributions election or agreement been operated? (yes/no) This is when the employer and the employee agree or jointly elect for the employee to meet the employer s liability to pay secondary NICs on certain types of share awards and share options gains. The employee can then get a deduction equal to the amount of secondary or employers NICs transferred when working out the amount chargeable to income tax. Question 20: Were all shares resulting from the exercise sold? (yes/no) Enter yes if shares were immediately sold on exercise or instructions were given to sell on exercise. The application of a price limit should be disregarded. Enter no if any shares were retained or at a later point the employee decides they now want to sell the shares.