SAYE Share Saver Plan

Curious if anyone has thoughts on whether a UK SAYE Share Saver Plan is "dangerous" in any way to US taxpayers.  I understand that there is no taxable event at purchase of the option or shares (at 3/5 years), but that capital gains will be payable (in both the UK and US) upon the sale of the shares.  Anything I'm missing here?

I think you are likely to be hit with PFIC (Passive Foreign Investment Company) taxes which can be very high.  I am unfamiliar with investments in SAYE schemes but if they are equivalent, in the eyes of the IRS, as a SIPP then you are okay in that they are behind a "pension wrapper". If the SAYE scheme is similar to a stocks and shares ISA then the IRS will tax the investments as a PFIC.

Hopefully someone more knowledgeable in this will come along and give advice.

I think you are likely to be hit with PFIC (Passive Foreign Investment Company) taxes which can be very high.  I am unfamiliar with investments in SAYE schemes but if they are equivalent, in the eyes of the IRS, as a SIPP then you are okay in that they are behind a "pension wrapper". If the SAYE scheme is similar to a stocks and shares ISA then the IRS will tax the investments as a PFIC.

Hopefully someone more knowledgeable in this will come along and give advice.

Thanks for the reply!  This is an option/equity purchase, so I wouldn't think that the PFIC rules apply given there is no investment fund in the mix?

Thanks for the reply!  This is an option/equity purchase, so I wouldn't think that the PFIC rules apply given there is no investment fund in the mix?

Yes, publicly traded  shares should not be a problem.

Just to close off this chain - after some further research/discussions with tax folks - these plans are unlikely to be IRS 409A compliant so may give rise to a mismatch of tax positions between the US and UK.