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Share incentive plans (SIPs) and save-as-you-earn (SAYEs) schemes will see higher limits from 6 April.
The maximum value of free shares that can be awarded in a SIP will rise from £3,000 to £3,600 a tax year, while partnership shares will be capped at £1,800 (from £1,500), subject to the figure being no more than 10% of an employee’s annual salary.
The maximum monthly amount an employee will be able to contribute to SAYE savings arrangements will go up from £250 to £500.
Share incentive plans (SIPs) and save-as-you-earn (SAYEs) schemes will see higher limits from 6 April.
The maximum value of free shares that can be awarded in a SIP will rise from £3,000 to £3,600 a tax year, while partnership shares will be capped at £1,800 (from £1,500), subject to the figure being no more than 10% of an employee’s annual salary.
The maximum monthly amount an employee will be able to contribute to SAYE savings arrangements will go up from £250 to £500.
The new legislation will not automatically override plan limits in a company’s existing SIP/SAYE rules, unless they refer to the maximums “as specified in ITEPA 2003, Sch 2 or 3” or similar; in which case, the new limits will apply.
Those contributing the current maximum to a SIP should not have their contributions automatically increased to the new uppermost amount. A rise can be instigated only by agreement between participant and company.
HMRC confirm that the SAYE limit rise is set to be brought into effect on 6 April by a Treasury order, and a new prospectus will be issued in advance. Only SAYE contracts entered into after 6 April under the terms of the new prospectus can take advantage of the new limit.
It may be possible to issue SAYE invitations with the new monthly savings limit before 6 April if the scheme rules allow, but it will not be possible to enter into contracts until after that date.
Invitations can be issued only once the Treasury order has been made and laid, giving certainty of the new limit coming into effect, and the new SAYE prospectus has been issued to the savings providers.
More information can be found in the latest edition of HMRC’s Employment-Related Shares and Securities Bulletin, which also features a timeline of the key dates and events relating to self-certification, registration and online filing of employee shares schemes.
