Employee benefit trusts: how do the taxation laws apply?

This information explains how taxation laws can apply to employee benefit trust (EBT) structures.

This information is relevant to you if:

• you are an employer who has set up, invested in, or is thinking of setting up or investing in an EBT to provide benefits for your employees, and you have associated expenditure with that EBT
• you are an employee who has entered, been asked to enter, or is thinking about entering an EBT with your employer.

What is an EBT?

An EBT is a special purpose entity (usually a trust), which:

• is established by an employer or an advisor of the employer
• receives money or assets from the employer (or an associate of the employer), and
• provides benefits to the employee (or an associate of the employee).

An EBT may be located offshore and it may be called a number of things including:

• 'Employee Incentive Plan'
• 'Employee Benefit Plan'
• 'Employee Entitlement Fund'
• 'Employee Investment Trust'
• 'Employee Savings Plan.'

This information does not apply to:

• complying superannuation funds
• approved worker entitlement funds
• share trusts holding shares or rights to shares in 'employee share schemes' to which former Division 13A of the Income Tax Assessment Act 1936 (ITAA 1936) or Division 83A of the Income Tax Assessment Act 1997 (ITAA 1997) applies.