13 May 08 Removal of double taxationThe Government will remove double taxation that arises in relation to certain employee share schemes (ESS) that use employee share trusts. The changes will apply in relation to capital gains tax (CGT) events occurring from 7.30 pm (AEST) on 13 May 2008.
Currently there is no CGT relief for the trustee (or beneficiary) of an employee share trust on the transfer of shares to an employee because shares acquired by an employee as a result of exercising ESS rights are not ESS shares. Double taxation arises because the capital gains made by the trustee while the shares are held in the trust are also assessable to the employee either under ESS provisions or later as a capital gain. This measure will ensure that CGT relief is provided.
For a copy of the Treasurer's press release, No 2008/44, 13 May 2008, go here