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Employee share plans


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.

Author profile

Rob Basker ATI
Rob is a Partner in the Global Employer Services team of Deloitte's Sydney office. He specialises in cross-border tax consulting and equity across a wide spectrum of client types and industries. He has more than 19 years of tax experience Australia, the UK and the US. Rob's experience includes advising clients on employee share and option schemes, and he is currently Deloitte's National Leader for Equity Practice. - Current at 16 May 2013
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