Income Tax (Earnings and Pensions) Act 2003 Schedule 3 paragraph 37

Exercise of options: company events

Schedule 3 paragraph 37 sets out the circumstances involving corporate events — such as takeovers, court-sanctioned compromises, non-UK reorganisations, and voluntary winding up — in which SAYE share options may be exercised early, and the time limits that apply.

• Options may generally be exercised within 6 months of a qualifying corporate event, such as a takeover, a court-sanctioned compromise or arrangement, a binding non-UK company reorganisation, or the company passing a resolution for voluntary winding up.
• Options may also be exercised at any time a person is bound or entitled to acquire shares under the Companies Act 2006 squeeze-out and sell-out provisions relating to takeover offers.
• If a corporate event causes the underlying shares to cease meeting the scheme's share requirements, the scheme may allow exercise within 20 days of that event, and may also treat options exercised in the 20 days before the event as validly exercised under these provisions.
• Where an option is exercised in anticipation of a qualifying event that does not then occur within 20 days, the exercise must be treated as having had no effect.