Share schemes available: Sharesave Schemes: Also known as Save As You Earn (SAYE), the savings related share option scheme is the most popular and gives employees the right to buy company shares (called an option) at a future date. The purchase price is determined before the option is granted but can be up to 20% lower than the market value. The scheme contract is set up with a bank or building society for three or five years and savings are taken from a staff member's net salary. They can save between £5 and £250 a month. At maturity employees have six months to decide what to do. They must close the account and then decide whether to take a tax free bonus, purchase an allocation of shares or take up the option in part. The New Employee Share Plan: Being introduced in August. Designed by the government to make employee share schemes more flexible using a combination of three modules. Companies can give up to £3,000 worth of free shares to a staff member free of income tax and NI, although a retention period of three years applies. Shares can also be awarded based on an employee's own performance or their work as part of a team. The other two modules are Partnership Shares which allow employees to buy shares from their weekly or monthly salary up to £1,500 a year, or employers can Match Shares, whereby the company gives the employee up to two free shares for each Partnership share. Again a retention period of at least three years applies. There are different taxation issues with the new scheme. Profit Share Schemes: A mechanism for providing free shares to employees free of tax. The company sets up and finances a trust to acquire shares and gives them to individual employees. These shares must be left in trust of two years. Company Share Option Plans: CSOPs were initially introduced to help companies motivate and reward senior managers and stop them leaving the company. Eligibility is discretionary but the rules often stated any options would lapse if an executive left the business. The total value of shares held under the CSOP must not exceed £30,000 at the option price which is fixed at the time of the grant and cannot be exercised in the first three years. {{COVER FEATURE }}