Tax-deferred schemes

ESS interests can be acquired under a taxed-upfront scheme, a tax-deferred scheme or, from 1 July 2015, a scheme that provides employees with the start-up concession.

Under a tax-deferred scheme, the discount the employee receives on the ESS interests is included in the employee's assessable income when the ESS deferred taxing point occurs.

In a tax-deferred scheme, the scheme and employee must satisfy certain conditions including:

  • for rights
    • there must be a real risk of forfeiture, or
    • (for rights acquired after 30 June 2015 only) there must be restrictions preventing immediate disposal and the scheme's rules must specifically state that it is a tax-deferred scheme.
  • for shares and stapled securities
    • there must be a real risk of forfeiture, or
    • the shares and stapled securities must be acquired under certain salary-sacrifice arrangements.

For information on real risk of forfeiture of ESS interests, see Real risk of forfeiture.

    Last modified: 01 Jul 2015QC 27241