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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Schedule 3 SAYE Option Scheme: General requirements: No preferential treatment for directors or senior employees

Paragraph 8 requires that the scheme does not and is not likely to have the effect of conferring benefits wholly or mainly on directors of group companies and employees of companies in the group that receive the higher or highest levels of remuneration. Scheme organisers should ensure that the requirements of paragraph 8(1)(b) are met. There must be no manipulation to include as constituent companies in a group scheme only those companies which mainly employ the higher-paid employees in the group.

Details of subsequent changes to constituent companies in share option schemes should, where appropriate, be reported in the annual return in accordance with the requirements of paragraph 40B(6) (refer to ETASSUM37080).

Scheme organisers should consider carefully the reason for the withdrawal from a group scheme of a constituent company which is still eligible to be one. If there are existing option-holders whose rights to exercise would be affected by their employing company ceasing to be a constituent company, its withdrawal from the group scheme may cause the scheme to cease to satisfy the requirements of paragraph 8.