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In a joint media release issued on 5 June 2009, the Treasurer, Wayne Swan, and the Assistant Treasurer, Chris Bowen, announced that the Budget measures regarding Employee Share Schemes would be modified to:

  • raise the income threshold for the $1,000 tax exemption up to $150,000;
  • introduce a limited deferral of the taxing point for schemes where there is a 'genuine risk of forfeiture', to protect employees who have a real risk of being taxed on a share or right that they might never get full title to;
  • modify the taxing point ('deferred taxing point') for shares, stapled securities and rights;
  • introduce an annual reporting requirement and associated withholding arrangements;
  • review the existing valuation rules;
  • modify the rules relating to the refund of income tax for forfeited benefits.
The Government proposes that these new arrangements will apply to shares or rights acquired on or after 1 July 2009. The existing law apply to all shares and rights acquired before 1 July 2009.

The Ministers also announced the release of a consultation paper and draft legislation on the tax treatment of Employee Share Schemes in line with its commitment to fast-track consultation. The closing date for submissions is Friday 12 June 2009.

For a copy of the joint media release, No 2009/061, 5 June 2009, go here

For a copy of the consultation paper and draft legislation and explanatory memorandum, go here

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