The H M Revenue & Customs approved Sharesave Plan was introduced 1980. It is an all-employee (i.e. participation must be offered to all qualifying employees) plan. At the time of the grant of the option the employee enters into a savings contract, the proceeds of which are then used to exercise the option on maturity of the savings contract. The main features of the Sharesave Plan are:-
The cash bonus paid under the savings contract is tax-free. Gains which arise on the exercise of the option following maturity is free of income tax. The discount of up to 20% of the share price at grant of the option is not subject to income tax. Capital gains may be chargeable but can be avoided or reduced by prudent timing and use of the annual exempt amount. Shares acquired on the exercise of an option which are put into a personal equity plan within 90 days of the exercise of the option can continue to be sheltered from tax. The company can obtain a corporation tax deduction for the cost of establishing and administering the Sharesave Plan. For further information please complete the enquiries form.
This briefing has been prepared for general guidance only and should not be acted upon without specific advice. Please contact us if you require further information.
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