Chapter 32 - Save as you Earn Schemes Flashcards
Define what a SAYE Scheme is
An arrangement whereby employees save a fixed amount each month into an SAYE account which may be topped up by a tax-free bonus from the bank
The funds can then be used to exercise options over the employer company shares
What criteria must be met for a SAYE scheme to be eligable?
- The employer company must be quoted
- All employees must be eligible to participate (although those with less than 5 years service may be excluded)
Options can be discounted up to a rate of what of the value of the shares at the date of grant?
20%
What are the two periods for SAYE accounts?
3 or 5 years
What are the maximum and minimum contributions into a SAYE account?
max - £500 per month
min - £5 per month
How are bonuses treated?
Bonuses are tax free
What are the income tax & NIC implications at the grant & exercise of the share options?
There are no implications
How do you calculate the capital gain on sale equal to the different between cost & sale proceeds?
Sale proceeds
LESS: cost (price paid)
True or false
If an employee leaves voluntarily, the options will lapse but the employee can continue saving or withdraw savings to that point
True
