SAYE

Question 1

Decriber the principles of a SAYE

Answer 1

The company will grant the option for an employee to buy shares at a discounted prices in 3 or 5 years time

The employee each month will save money in a SAYE account

In 3 or 5 years time depending on the term, they will be able to excercise the option

The saving are made net of their salary (no tax saving) therefore no income tax implications when excercised.

The bank may add a bonus (this is tax free)

The only tax implication is to CGT when the shares are sold

Question 2

Conditions:
Discount
Max
Min
Company Min

Answer 2

Maximum discount a company can offer the employee is 20% of the MV at date option is granted

Maximum amount an employee can contribute each month is £500

The minimum amount an employee can contribute each month is £5

A company can impose a minimum amount however this can not be more than £10

Question 3

Main Tax Implication

Answer 3

No income tax implications only CGT when shares are sold