Income Tax (Earnings and Pensions) Act 2003 Schedule 3 paragraph 24

Payments for shares to be linked to approved savings arrangements

Paragraph 24 of Schedule 3 requires that shares acquired through a Save As You Earn (SAYE) share option scheme must be paid for using the proceeds of an approved SAYE savings arrangement.

• Shares acquired by exercising options under an SAYE scheme must be paid for from the employee's linked SAYE savings arrangement
• The amount used to pay for shares cannot exceed the total of repayments made and any interest paid under that savings arrangement
• The SAYE savings arrangement must be a certified arrangement that has been specifically approved by an officer of HMRC for the purposes of the scheme
• This rule ensures that the share purchase is genuinely funded by the employee's regular savings, maintaining the intended link between saving and share acquisition