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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Schedule 3 Save As You Earn (SAYE) option scheme: Grant of share options - Whether rights are obtained

The share option granted within a Schedule 3 SAYE Option scheme is no different from one granted within a Schedule 4 CSOP scheme (see ETASSUM40130) so the same principles apply, scheme organisers will need to ensure that a scheme meets the requirement of providing participants with legally enforceable ‘rights to acquire shares’; this includes that it provides for the key terms of the option to be clearly stated at the time it is granted.

The key terms of an option are:

  • the asset under option which the option-holder has a right to acquire (in the case of a share option this will be reflected by a specified number of shares of a specified class),
  • the price at which the option can be exercised, and
  • the time when the option is exercisable.

Whether the terms of options are sufficiently clearly stated must be considered in the light of the decision in CIR v Burton Group plc (63 TC 191). Further guidance on this case is at ETASSUM47250.