SAYE option scheme
A type of employee share scheme (www.practicallaw.com/A35041) (also known as a sharesave scheme, save as you earn option scheme or savings related share option scheme) which provides for the grant of share options (www.practicallaw.com/0-107-6937). The exercise price can be set at up to a 20% discount to the market value at the time of grant.
Participation must be available to all employees, subject to a qualifying period of service which cannot be more than with five years (and others may be included). The grant of the option is conditional on the employee taking out a linked savings arrangement with a bank or building society to save up the option exercise price. Option holders save up to £250 per month from salary. Options are normally exercisable for six months after three or five years. The maximum monthly savings will be increased in 2014 to £500 (see Practice note, Employee share schemes and Finance Bill 2014: summary of changes: SAYE option schemes (www.practicallaw.com/9-551-9846)). Such schemes are approved by HM Revenue & Customs (www.practicallaw.com/6-200-6399) (HMRC) under Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003.
For further details of SAYE option schemes, see Practice note, Employee share incentive schemes: an introduction (www.practicallaw.com/9-107-4444).
Note that Finance Bill 2014 will abolish the requirement for SAYE option schemes to be pre-approved by HMRC, replacing it with a self-certification regime. For more information, see Practice note, Employee share schemes and Finance Bill 2014: summary of changes: SAYE option schemes (www.practicallaw.com/9-551-9846).