Income Tax (Earnings and Pensions) Act 2003 Schedule 3 paragraph 5

General restriction on contents of scheme

Paragraph 5 of Schedule 3 restricts the purpose and content of a CSOP scheme to the provision of share option benefits only, in accordance with the rules set out in Schedule 3.

• The sole purpose of the scheme must be to provide benefits to employees and directors in the form of share options
• Benefits must be provided strictly in accordance with Schedule 3 and no other basis
• The scheme must not offer any benefits outside the scope of the Schedule 3 rules
• Cash alternatives to share options, or to shares that would be acquired on exercise of options, are expressly prohibited