Income Tax (Earnings and Pensions) Act 2003 Schedule 3 paragraph 27

Requirements etc. relating to share options: introduction

Paragraph 27 introduces the mandatory requirements and optional provisions that an SAYE (Save As You Earn) option scheme must or may include in relation to share options.

• An SAYE option scheme must meet mandatory requirements covering share acquisition pricing, non-transferability of options, general timing for exercising options, exercise on death, and exercise when scheme-related employment ends.
• The scheme may also include optional provisions dealing with the exercise of options where a participant is employed by an associated company at the bonus date.
• Further optional provisions may address the exercise of options when certain company events occur, such as takeovers or reorganisations.
• The distinction between mandatory requirements and optional provisions gives scheme administrators a core framework that must be followed, with additional flexibility where circumstances warrant it.