Employee share schemes 2013

Employee share plans

Source: The Tax Specialist Journal Article

Published Date: 1 Aug 2013


The current rules about the taxation of employee share schemes (ESS), embodied in Div 83A of the Income Tax Assessment Act 1997, have been in force for around four years. This article examines the impact of the new rules on the design and operation of ESS in Australia. The article considers features and consequences of ESS on and after 1 July 2009, including the use of options and the trend towards full value restricted shares and performance rights to shares, difficulties with applying the concepts of “real risk of forfeiture” and “genuine restriction on disposal” tests to real life situations, and ESS withholding and reporting to the Australian Taxation Office.

The article concludes with a comparison of equity treatment rules in Australia and the Asia-Pacific region.

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Employee share schemes 2013

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