3. Save As You Earn (SAYE)
This is a savings-related share scheme where you can buy shares with your savings for a fixed price.
You can save up to £500 a month under the scheme. At the end of your savings contract (3 or 5 years) you can use the savings to buy shares.
The tax advantages are:
- the interest and any bonus at the end of the scheme is tax-free
- you don’t pay Income Tax or National Insurance on the difference between what you pay for the shares and what they’re worth
If you sell the shares
You might have to pay Capital Gains Tax if you sell the shares.
You won’t have to pay if you put them into:
- an Individual Savings Account (ISA) within 90 days of buying them
- a pension as soon as you buy them