Employee Share Scheme & New Rules
The Treasury has released an exposure draft of legislation relating to Employee Share Schemes (ESS).
The exposure draft follows the announcements in the May Federal Budget. The key aspects of the proposed amendments are that it removes the cessation of employment as a deferred taxing point. The deferred taxing point will now be the earlier of:
- In the case of shares, the time that there is no real risk of forfeiture and no genuine restrictions on disposal of the shares;
- In the case of options, the time that there is no real risk of forfeiture and no genuine restrictions on disposal of the options or if the options have been exercised there is no real risk of forfeiture and no restrictions on disposal of the shares; or
- 15 years from the time the ESS interest was acquired.
Should you be involved with ESS as either a company wishing to or having granted ESS rights, an employee contemplating participating in an ESS scheme, or a present presently being a member of an ESS scheme and you require any information about the ESS, please do not hesitate to contact us.