Sharesave

This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages) This article's tone or style may not reflect the encyclopedic tone used on Wikipedia. See Wikipedia's guide to writing better articles for suggestions. (January 2009) (Learn how and when to remove this template message) This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Sharesave" – news · newspapers · books · scholar · JSTOR (January 2009) (Learn how and when to remove this template message) (Learn how and when to remove this template message)

Sharesave, also known as Save As You Earn, SAYE, or the Savings Related Share Option Scheme, is a British savings scheme designed to encourage employees to buy stakes in the companies for which they work.

. From 6 April 2014, HMRC approval will no longer be required for a SAYE plan to obtain tax benefits, instead an employer is required to self-certify that the SAYE meets the requirements of the relevant legislation. Accordingly, from 6 April 2014, a SAYE plan should no longer be referred to as an HMRC approved plan.

Mechanism

Under Sharesave, a company offers its employees the right (known as the option) to buy

in the company at a future date. The option may be granted at a discount of up to 20% of the current share price. The employee then chooses to save between £5 and £500 per month out of their net pay over a three or five-year term.

Maturation

When the contract matures, a tax-free bonus is received. The employee can then choose either to exercise the option to buy the shares with the proceeds from the savings contract, or to take the proceeds and the bonus. The bonuses are equivalent to

, within 90 days of exercising the option. Capital gains made on these shares are then tax-free. There is a limit on the value of shares that can be transferred, and the ISA manager must agree to take them.

Conditions

Companies must offer sharesave schemes to all employees who meet the eligibility criteria, which often includes a requirement to remain in employment for at least 5 years.

Providers

Sharesave schemes are operated for companies by banks, building societies, or European Authorised Institutions which must first be authorised by the Treasury to operate. Yorkshire Building Society, Computershare, and Barclays are some of the domestic providers.

Reception of the scheme

The Confederation of British Industry (CBI) and major political parties have acknowledged the benefits of employee shared ownership^{[citation needed]}. These benefits include an increased employee awareness of the effect of their actions on a company's success; enhanced relationships between employees and management; tax-free savings advantages for employees; expanded share-holder bases for companies; and increased employee motivation and enhanced performance.

See also

• Employee stock ownership plan
• Employee stock option
• Share Incentive Plan

• LTIP
• Profit Sharing

References

External links

• https://www.gov.uk/tax-employee-share-schemes