The following Share Incentives practice note provides comprehensive and up to date legal information covering:
This Practice Note covers the following topics:
attractions of save as you earn (SAYE) schemes
can the company qualify to operate an SAYE scheme?
corporate acquisitions and mergers
when is the SAYE scheme particularly appropriate?
does the SAYE scheme meet the company’s objectives?
overseas parent with UK workforce
employee incentive requirements
ongoing administrative burden and costs
accounting treatment, and
SAYE schemes tend to be attractive to employees because:
they are a tax-efficient way of acquiring shares in their employer at a discount of up to 20% from their value when the option was granted—generally if exercised after three years of their date of grant or in certain circumstances before three years, SAYE options are income tax and NIC-free and the proceeds of selling the shares are subject only to capital gains tax. For details of the tax treatment of SAYE options, see Practice Notes: SAYE—income tax and NIC treatment of options and SAYE—capital gains tax treatment of options
they encourage employees to save in a tax-efficient way
they offer the employee flexibility—there is no real exposure to share price movement in relation to their award as there is no obligation on employees to exercise their options and instead, employees can simply withdraw their savings (with a potential tax-free bonus if they keep saving for the period of the savings
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