The following Share Incentives practice note provides comprehensive and up to date legal information covering:
This note covers the following topics:
the law governing save as you earn (SAYE) options
what is an SAYE scheme?
what requirements must be met for an SAYE scheme?
which companies can operate an SAYE scheme?
who can be granted SAYE options?
what must the exercise price be?
when can an SAYE option be exercised?
when does an SAYE option lapse?
which requirements apply to the linked savings arrangement?
what other requirements apply to SAYE schemes?
self-certification and notification requirements
tax treatment of SAYE options, and
tax reporting requirements
The legislation governing SAYE options is as follows:
sections 516–520 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) (Chapter 7)
ITEPA 2003, Sch 3 Pt 1–Sch 3 Pt 9
sections 702–708 of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), and
Schedule 7D, Part 2 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992)
An SAYE scheme is a type of tax-advantaged employee share scheme under which participants are granted a tax-efficient share option and are required to enter into a linked savings arrangement with a bank or building society. Other names for SAYE schemes are sharesave schemes or savings-related share option schemes.
As SAYE schemes are designed to be offered to all employees (rather than on a selective basis), they
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