Sharesave is a simple Revenue approved scheme aimed at promoting your direct participation in the success of the company by inviting you to save money in order to buy shares in Diageo plc at a future date, and at a fixed discounted price.
You can save any amount from €12 to €500 per month for either 3 or 5 years. Your savings are deducted from your salary and paid into an account with the Sharesave Plan Manager.
At the end of the savings period, you will receive a guaranteed tax-free bonus (effectively interest, but with no Deposit Interest Retention Tax (DIRT) deducted). This is added to your savings and the total can be used to buy Diageo shares.
If you decide to buy the shares you pay the price at the time of invitation. This price, known as the option price, is the Diageo share price, at the time of invitation, discounted by 20 per cent. The number of shares you can buy depends on how much you save, the option price and how long you save for. When you join Sharesave you will receive an option certificate telling you how many shares you will be able to buy if you save to the end of the savings period.
You don’t have to use your savings to buy the shares – you can take some or all of your savings and any bonus in cash if you wish. If you do this, your option will lapse and you will no longer be able to buy the shares at the discounted price. You can suspend your payments for up to 6 months (but you will lose your option to buy shares if you miss more than 6 months payments).
You can stop saving at any time and close your account but, you will lose the option to buy shares.
Saving is effortless: deductions are made from your post-tax salary automatically each month.
You can withdraw your savings at any time (but you will lose the right to buy shares) and receive a full refund of contributions.
At the end of the period you can buy shares at the original discounted price, using your savings and any interest.
If you are paid from an Irish payroll and are employed by Diageo when the annual results are announced, you can join a Sharesave plan when the invitations are sent out, usually in August each year. You must also be employed in January of the following year so that your first monthly payment can be taken from your salary.
An award under the Irish Sharesave plan is launched once a year. If you are eligible to take part in a Sharesave plan, you will be sent an invitation pack before the plan is due to start.
You can apply to join a Sharesave plan by telephone or online. More instructions are given in the invitation pack.
If you think you are eligible but you have not received an application form, please contact your local HR department.
You can miss a maximum of 6 payments during your whole savings period BUT, you must make these up at the end of your savings period, month for month, before you can exercise your Sharesave option.
To suspend your Sharesave payments, you must send a completed instruction form to your payroll to stop your monthly deduction. If you miss more than 6 payments, then your Sharesave plan will be cancelled and you will not be able to exercise your Sharesave option.
When you start a Sharesave option, you agree to save for a set period of time (3 or 5 years). You must complete your savings period before you can exercise your option. In exceptional circumstance, such as redundancy, retirement, and other good leaver reasons, your option may be exercised early to the extent of your savings at the time of the relevant event, or up to six months thereafter.
The maturity date is the earliest date that your Sharesave option can be exercised.
You can view your sharesave options by logging on to Employee Shareplan Information.
If you leave the company on redundancy, you must exercise your option(s) within six months of your date of redundancy.
As the current Sharesave scheme is Revenue approved there is no income tax payable on the exercise of the option. If you subsequently sell the shares however, there may be a Capital Gains Tax liability.
Following the Irish Budget 2011, any gain on options exercised under SAYE Approved Share Option Schemes on or after 1 January 2012 will continue to be exempt from Income Tax but will be subject to Universal Social Charge (USC) and Pay Related Social Insurance (PRSI). The gain is valued at the difference between the original option price and the mid market share price on the day of exercise.
Following the Irish Budget 2011 any gain on options exercised under SAYE Approved Share Option Schemes on or after 1 January 2012 will continue to be exempt from Income Tax but will be subject to Universal Social Charge (USC) and Pay Related Social Insurance (PRSI). The gain is valued at the difference between the original option price and the mid market share price on the day of exercise.
If you are a current employee, the liability will be accounted for through the payroll process in the months following exercise and will be shown on your payslip as SAYE GAIN. The resultant deductions will be taken from pay over 2 months.
If you are no longer employeed by Diageo plc and it is not possible to collect the liability via the usual payroll process, we will provide you with details of the gain resulting from the exercise so that you can include it on your annual tax return.
Sharesave shares are Diageo ordinary shares. After you have exercised your Sharesave option you will receive a share certificate for your Diageo ordinary shares. These can be sold or transferred in the normal way.
Please note there may be a Capital Gains Tax liability when you sell your shares.
For more information on selling shares click here.