Income Tax (Earnings and Pensions) Act 2003 section 28

Requirements as to price for acquisition of shares

Section 28 sets out the rules governing the price at which shares may be acquired under a Save As You Earn (SAYE) share option scheme, including minimum pricing requirements, adjustments for changes in share capital, and disclosure of restrictions.

• The option exercise price must be stated at the time of grant and must not be manifestly less than 80% of the market value of shares of the same class at that time (or at an earlier time permitted by HMRC guidance)
• The scheme may allow the exercise price, number of shares, or description of shares to be varied to reflect changes in share capital, provided the total market value and total exercise price remain substantially the same before and after the variation
• When a share option is granted, it must be stated whether the shares are subject to any restriction, and if so, full details of the restriction must be disclosed
• Where shares are subject to a restriction, their market value for the purposes of this paragraph must be determined as if no restriction applied