Changes in Capital Gains Tax: the impact on SAYE participants

The tax-free allowance for Capital Gains Tax (CGT) will be reduced from £12,300 to £6,000 next month. Next April, it will be reduced further – to £3,000.

This change could impact SAYE participants. Many SAYEs launched during the pandemic were at record low option prices, and there’s potential for gains at maturity to fall because of these reduced allowances.

How does CGT affect SAYE?

If a participant exercises their share options, they may be subject to CGT on any gains they make when they sell their shares. The changes mean they’ll pay CGT on a lower level of profit – which could affect an increasing number of participants.

As well as impacting the value of their investment, there’s another consideration: education.

Most employees will know about income tax, National Insurance contributions and Council Tax. But few deal with CGT regularly. With more participants likely to meet the threshold for CGT, some organisations with SAYEs are raising questions. At a recent ProShare workshop, companies asked:

  • Will participants be required to complete self-assessment tax returns?
  • What’s the best way to communicate CGT changes to participants at maturity?
  • What will companies need to include in future launch comms?
  • What steps could we take to limit the financial impact on plan participants?

The common theme – communication

So, what can we do to limit the impact of the changes in CGT on SAYE participants?

The answer is: focus on communication

To empower participants to make the best choice for their personal circumstances, you need to engage with them, and educate them on the changes. Here’s how.

1. Educate plan participants about the potential changes to the CGT exemption.

Explain the concept of capital gains, and how it’s taxed. Then encourage your participants to review their current investments. This should empower them to make informed choices about when they may want to sell their shares. For example, if your SAYE will reach maturity in December, your participants may choose to exercise in the first four months to avoid the lower CGT exemption that will comes into force in April 2024.

2. Review current content.

Tax is complex and difficult to explain simply. But it’s worth putting the effort into creating content that is clear enough for your participants to understand.

Expand your tax communications. Add a section on CGT changes to your current communications. But do it in bite-sized chunks that people can tap into as and when they need it – it’s much less daunting. You can host this on your intranet or a dedicated share plan microsite. Create and execute a communications plan to drive your participants to the information they need.

3. Prepare for the future

Consider introducing CGT calculators. It will empower participants to easily see how CGT can impact their current investment, and see how they contributions might be impacted in the future.

4. Financial advice

You can’t give participants financial advice. But you can provide access to independent financial advisors. They could help participants make informed decisions about their investments.

5. Listen to your employees

Work with plan participants to develop communications that engage, educate and empower. Ask them to share their concerns, and use their questions to help steer your CGT communication content. You can do that by holding town halls, for example, or creating a dedicated channel for employees to ask questions and voice their concerns.


If participants feel they have enough knowledge to make empowered decisions, they’re more likely to consider investing in future share plans. So it’s essential to have a clear, concise communications plan.

Get in touch to find out how we can help communicating CGT changes and their impact on your share plan participants.

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