Up to its exit from the Irish market, Ulster Bank was the last remaining licensed savings carrier for the purposes of operating Save As You Earn (SAYE) incentive schemes in Ireland.
As a result, employers have for a number of years been unable to offer new SAYE schemes to their employees.
However, recent indications are that is due to change as a financial institution may be seeking Revenue authorization as a licensed savings carrier, thereby enabling companies to continue offering SAYE schemes. This is a welcome development for employers as an additional means of attracting and retaining talent in a competitive market.
SAYE schemes allow employers (often UK-listed and Irish-listed public companies) grant share options to employees on a favorable tax basis. Key features of SAYE schemes include:
- Employees can be given the option to acquire shares in their employer at a 25% discount.
- Employees can save between €12 and €500 per month with a licensed savings carrier for a period of 3, 5 or 7 years.
- SAYE schemes must be approved by Revenue.
- When the savings period ends, employees can decide to exercise the share option or can withdraw the entire savings amount tax free.
- Employers can deduct the costs of establishing the scheme from corporation tax.
- While employers must offer the SAYE scheme on similar terms to all eligible employees, they are free to set a qualifying period (up to a maximum of 3 years) before the grant of the options.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.