ACCA Advanced Taxation (ATX) Practice Exam

What is the exercise period options in the SAYE scheme?

1. 1 or 5 years

2. 3 or 6 years

3. 3 or 5 years

4. 5 or 10 years

The correct answer is: 3 or 5 years

The correct choice regarding the exercise period options in the Save As You Earn (SAYE) scheme is indeed that it can range between three to five years. The SAYE scheme is designed to encourage employees to save towards buying shares in their employer's company. The scheme allows employees to save a fixed amount each month over a specified period, which typically spans from three to five years. During this exercise period, participants accumulate savings that can later be used to purchase shares at a predetermined price, which is set when the scheme is initiated. The three to five-year timeframe allows employees to either see the growth potential of their investment or choose other financial plans according to their circumstances, fostering a culture of saving and investment. The other options presented, such as one or five years, three or six years, and five or ten years do not align with the standard rules governing SAYE schemes, which specifically allow for a minimum of three years and a maximum of five years as the exercise period. This structured flexibility is a key feature that incentivizes participation in the scheme.