To qualify for concessional tax treatment the following general conditions must be met:
- the ESS interests you provide to your employees must be in your company or your holding company
- when your employee acquires the interest, all ESS interests available for acquisition under the scheme must relate to ordinary shares
- immediately after acquiring the ESS interests, your employee (and their associates) must meet the
- 5% ownership and voting rights test (ESS interests acquired before 1 July 2015)
- 10% ownership and voting rights test (ESS interests acquired after 30 June 2015).
When your employee won't be eligible
Your employees will not be eligible for concessional tax treatment if all of the following apply:
- the main business of the company in which they acquired the ESS interests is the acquisition, sale or holding of shares, securities or other investments (directly or indirectly)
- they are employed by both your company and a subsidiary of your company or a holding company of your company, or a subsidiary of the holding company.
Specific conditions also apply
Once the general conditions are met, the conditions that are specific to each concession must also be met.
Find out about:
Most ESS allow your employees concessional tax treatment if they receive their ESS interests at a discount and certain conditions are met.