SAYE—exchange of options
SAYE—exchange of options

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • SAYE—exchange of options
  • The law governing the exchange of SAYE options
  • Exchange of SAYE options
  • Circumstances in which exchange of options is permitted
  • Requirements in respect of the replacement options
  • Tax treatment of exchange
  • Practical considerations relating to SAYE rollovers
  • Timing of rollover/exchange
  • Scheme rules permitted exchange of options
  • Agreement by option holder

SAYE—exchange of options

This Practice Note covers the following topics:

  1. the law governing exchange of save as you earn (SAYE) options

  2. exchange of SAYE options

    1. circumstances in which exchange is permitted

    2. requirements in respect of the replacement options

    3. tax treatment of exchange, and

  3. practical considerations relating to SAYE rollovers

The law governing the exchange of SAYE options

The legislation governing the terms on which SAYE options can be exchanged on the occurrence of a corporate event can be found in paragraphs 38–39, Schedule 3, Part 7 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).

For more information on SAYE options generally, see Practice Note: How SAYE schemes work and key features.

For more information on how SAYE options are impacted on a corporate event, see Practice Note: SAYE—corporate events.

It is possible to have more than one rollover, provided the scheme rules are suitably drafted to cater for a change in the company whose shares are scheme shares following each successive rollover.

Exchange of SAYE options

Following a company re-organisation, such as the introduction of a new group holding company without any change to the ultimate share ownership of the group, it is often appropriate for existing SAYE options to be replaced with options over shares in the new parent company, rather than a company which has become a subsidiary. This is usually referred to as an exchange or

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