Part 7Employment income: share-related income and exemptions

Chapter 7Approved SAYE option schemes

Introduction

516Approved SAYE option schemes

1

This Chapter provides—

a

for the approval of SAYE option schemes by the Inland Revenue, 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 the Inland Revenue 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—

    1. a

      for share options to be granted to employees and directors, and

    2. b

      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 approved savings schemes);

  • “share option” means a right to acquire shares in a company;

  • “shares” 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.