SAYE Share Option Scheme
An Approved SAYE Share Option Scheme is a highly tax efficient method for both quoted and unquoted companies to transfer value to employees, while also helping employees to identify with the success of their employer.
Employees are encouraged to stay with their employer while their benefits mature.
Download the SAYE Share Option Scheme fact sheet
Sharesave
Employees agree to save a given sum of money each month with a bank or building society. They receive tax free bonuses after fixed periods of 3, 5 or 7 years. Under Approved SAYE Share Option Plans, the company grants employees an option to use the proceeds of their SAYE Share Scheme, including tax free bonuses, to purchase company shares when their savings contracts mature. Employees may save up to £250 per month under an Approved Scheme.
Discount to market value
Under an Approved SAYE Share Option Scheme, employees can acquire shares for a discount of up to 20 per cent. on fair value at the date of grant. The market value of unquoted shares is agreed with the Shares and Assets Valuation Division of HM Revenue & Customs.
There is no tax on the grant or exercise of the options. On sale of the shares acquired, capital gains tax is payable at 18 per cent. but only if the gain exceeds the annual personal exemption (£10,100 in 2009/10). In an Approved SAYE Share Option Scheme employees can recover their cash at any point prior to option exercise.
You may download our factsheets on the above subjects, view our online Directors’ Guide or ask for a free consultation.
