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Employee Share Schemes - The State of Play

Published on 15 Jul 2009 | Took place at RACV Club, Melbourne, VIC

As part of the 2009/10 Federal Budget, it was announced that tax will be payable on the grant of all ‘qualifying' shares and rights to acquire shares under employee share schemes which are acquired after 7.30pm on 12 May 2009. Further, it was announced that the $1,000 tax exemption would only apply to taxpayers with an adjusted taxable income less than $60,000.

Only 12 days later, in response to significant community concerns about the unexpected and broad ranging budget announcement, a joint media release was issued from the Treasurer and the Assistant Treasurer. That release indicated that the Government proposed to undertake a consultation process on the budget measures dealing with employee share schemes and that the consultation process would begin with the release of a policy options paper before mid June 2009.

Equity based remuneration will be significantly impacted if the Government's proposal proceeds in the form of the budget announcement. Even if the Government decides, as a result of the consultation process, to refine or better target its measures, there are still likely to be changes required to the way some employee equity offers are made in Australia.

This event outlined the current state of play on employee share schemes.

Individual sessions

Taxation of employee share schemes – The current state of play

Author(s):  Sarah BERNHARDT This paper:

  • outlines the current state of play on employee share schemes
  • reviews the Government's proposal and policy options paper
  • considers any transitional issues for existing schemes
  • reviews whether existing schemes will need to be restructured or withdrawn
  • considers the impact of the proposals on the operation of share plans.
Materials from this session: