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ATO Interpretative Decision

ATO ID 2002/960

Income Tax

Fringe Benefits Tax - employer contributions to Trustee of its employee share scheme are not a fringe benefit
FOI status: may be released

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CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Are contributions made by the company taxpayer to the Trustee of its employee share scheme for the purpose of its employee share scheme not be subject to fringe benefits tax by virtue of paragraph 136(1)(hb) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Decision

Contributions made by the company taxpayer to the Trustee of its employee share scheme for the purpose of its employee share scheme are not be subject to fringe benefits tax by virtue of paragraph 136(1)(hb) of the FBTAA.

Facts

The employer has an Employee Share Scheme that complies with the provisions of Division 13A of the Income Tax Assessment Act 1936 ('ITAA 1936').

A Trustee is appointed to administer the Scheme. The employer makes irretrievable contributions to the Trustee each year. The sole activities of the Trustee are obtaining shares or rights in the employer company or a holding company of the employer, and providing those shares or rights to the employees of the employer.

Reasons for Decision

The sole activities of the Trustee are the obtaining of shares or rights from the employer or a holding company of the employer and providing those shares or rights to the employees of the employer. Therefore, the contributions by the employer to the Trustee are not fringe benefits by virtue of paragraph 136(1)(hb) of the FBTAA.

Date of decision:  30 July 2002

Year of income:  Year ended 30 June 2002

Legislative References:
Fringe Benefits Tax Assessment Act 1986
   paragraph 136(1)(hb)

Related ATO Interpretative Decisions
ATO ID 2002/967
ATO ID 2002/968

Keywords
Employer contributions
Fringe benefit tax
Benefit
Employee share schemes & options
Share discounts on employee share schemes

Business Line:  Public Groups and International

Date of publication:  2 October 2002

ISSN: 1445-2782

history
  Date: Version:
You are here 30 July 2002 Original statement
  6 May 2011 Archived

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