Giving a monthly amount to a friend to save for me in a share scheme - legalities?

MDMD

refluxer said:

To those saying these schemes are inherently risky, have the rules changed in recent years ?

When I used to participate in my employer's SAYE share scheme, it was literally a no-brainer. If the share price dropped below the initial offer price, you could take the cash plus they would add a certain number of monthly deposits on top which effectively gave you interest on the money you'd saved. If the share price had risen, then you could take the shares and either keep them, sell them (and make an instant profit) or pay them directly into a S&S ISA to limit any future tax liabilities. 

Saying all that, I still wouldn't participate in a friend's scheme in the way the OP suggested.

The bonus rates have been set at 0% for a while (since December 2014) so you have the risk of the lost opportunity cost of tying up up funds for 3-5 years at 0%.

https://www.gov.uk/government/publications/change-in-bonus-rates-for-save-as-you-earn-saye-share-option-schemes

jaypers

I suspect that the rules of a company share scheme mean that it is intended for the employee and not transferable. From a legality point of view I suspect that it’s a tricky area and it can only be on a good will basis.

london21

Not worth the risk. 

When they change roles then what happens, the scheme ends once employment ends. 

refluxer

MDMD said:

refluxer said:

To those saying these schemes are inherently risky, have the rules changed in recent years ?

When I used to participate in my employer's SAYE share scheme, it was literally a no-brainer. If the share price dropped below the initial offer price, you could take the cash plus they would add a certain number of monthly deposits on top which effectively gave you interest on the money you'd saved. If the share price had risen, then you could take the shares and either keep them, sell them (and make an instant profit) or pay them directly into a S&S ISA to limit any future tax liabilities. 

Saying all that, I still wouldn't participate in a friend's scheme in the way the OP suggested.

The bonus rates have been set at 0% for a while (since December 2014) so you have the risk of the lost opportunity cost of tying up up funds for 3-5 years at 0%.

https://www.gov.uk/government/publications/change-in-bonus-rates-for-save-as-you-earn-saye-share-option-schemes

Ah, OK - thanks. Yes, that makes a big difference to such a scheme and I can see why that makes it less attractive and more of a risk these days.

I seem to remember the bonus payment being equivalent to 9 times your monthly payment for the 5 year scheme when I first started (giving you an interest rate of over 5% if you took the cash instead of shares on maturity), although this did reduce considerably over the years I was with the company.