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Textual Amendments
F1Pt. 7 heading substituted (with effect in accordance with Sch. 22 para. 2(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 2(1)
Modifications etc. (not altering text)
C1Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)
(1)This Chapter provides—
(a)for the approval of SAYE option schemes by [F2an officer of Revenue and Customs] , and
(b)for exemptions from income tax in connection with share options granted under those schemes.
(2)Schedule 3 contains the requirements that have to be met for an SAYE option scheme to be approved, together with the approval procedure.
(3)The provisions of—
(a)this and the following sections of this Chapter,
(b)Schedule 3, and
(c)Part 2 of Schedule 7D to TCGA 1992 (approved SAYE option schemes: amount of consideration on exercise of option),
together constitute “the SAYE code”.
(4)In the SAYE code—
“approved” means approved by [F2an officer of Revenue and Customs] under Schedule 3 (see paragraph 1 of the Schedule);
“SAYE option scheme” means a scheme (commonly referred to as an SAYE share option scheme) which is established by a company and provides—
for share options to be granted to employees and directors, and
for the shares acquired by the exercise of the share options to be paid for in the way mentioned in paragraph 24 of Schedule 3 (payments for shares to be linked to [F3approved savings arrangements] );
“
” means a right to acquire shares in a company;“
” includes stock.(5)Other expressions used in the SAYE code and contained in the index at the end of Schedule 3 have the meaning indicated by the index.
Textual Amendments
F2Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(1); S.I. 2005/1126, art. 2(2)(h)
F3Words in s. 516(4) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 605 (with Sch. 2)
(1)This Chapter applies to a share option granted to an individual—
(a)in accordance with the provisions of an approved SAYE option scheme, and
(b)by reason of the individual’s office or employment as a director or employee of a company.
(2)The individual may be a director or employee of the company whose shares are the subject of the share option, or of some other company.
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Textual Amendments
F4S. 518 repealed (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 29(1)(2), Sch. 43 Pt. 3(4); S.I. 2003/1997, art. 2
(1)No liability to income tax arises in respect of the exercise of the share option if—
(a)the individual exercises it in accordance with the provisions of the SAYE option scheme at a time when the scheme is approved, F5...
(b)condition A or B is met [F6and
(c)the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised.]
(2)Condition A is that the option is exercised on or after the third anniversary of the date on which it was granted.
(3)Condition B is that the option—
(a)is exercised before the third anniversary of the date on which it was granted, and
(b)is so exercised otherwise than by virtue of a provision included in the scheme under—
paragraph 34(5) of Schedule 3 (exercise of option where scheme-related employment ends), or
paragraph 37 of that Schedule (exercise of option where certain company events occur).
F7(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)In Schedule 3—
(a)paragraph 32 provides for the exercise of an option where the holder has died, and
(b)paragraph 42(3) provides for an SAYE option scheme to be treated as approved at the time when an option is exercised even though approval of the scheme has been previously withdrawn.
Textual Amendments
F5Word in s. 519(1)(a) repealed (with effect in accordance with s. 88(11) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)
F6S. 519(1)(c) and word inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(6)
F7S. 519(4) repealed (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 30(1)(2), Sch. 43 Pt. 3(4); S.I. 2003/1997, art. 2
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Textual Amendments
F8S. 520 repealed (16.4.2003 with effect in accordance with Sch. 22 para. 31(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 31(1), Sch. 43 Pt. 3(4)