SAYE Share Purchases

sabelu

My employer is offering me shares at a monthly discount of 15% of the price on a selected date over a six month period. Should this share purchase scheme pay for the shares prior to calculation of my PAYE hence effectively saving on the tax or would this be deducted after my PAYE is taken?

How are these schemes administered?

agrinnall

Wouldn't it be better to ask your employer these question?

marvin

It does really depend on the scheme but if it is a monthly share purchase scheme then yes it should come out before tax thus saving you that.

The scheme is likely to be administered through Computershare as many of them are.

The schemes are limited by law to a maximum per year because of this tiny tax perk and is why the millionaire directors of Tesco and Sainsburys all take part in the their relative schemes.

But as has been said you really should be addressing this to your employer.

martinsurrey

marvin wrote: »

It does really depend on the scheme but if it is a monthly share purchase scheme then yes it should come out before tax thus saving you that.

nonono,

ALL SAYE contributions are out of POST tax income.

The bonus (in this case 15%) is tax free, and any gain made on exercise is income tax free, but both gain and bonus are liable to CGT when you come to sell.

Dead_keen

If the shares are being bought every six months then it is not an SAYE scheme.

The 15% discount suggests that it may be a US-style employee stock purchase plan. If it is, your savings come out of your post-tax pay. You will also pay tax on the discount.

It could be a tax advantaged Share Incentive Plan with a six months accumulation period. If so, you can buy 'partnership shares' with your pre-tax pay. The discount in this case would be given as 'matching shares' and would be tax-free (with tax normally due if you take the shares out of the plan within five years).

To be sure what you have, you need to look at the material that your employer gives you.