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ATO Interpretative Decision

ATO ID 2002/965

Income Tax

Income Tax -Trustee not assessable on employer contributions made to it under the employer's employee share scheme
FOI status: may be released
  • This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Will the Trustee of an employee share scheme Trust be assessed under sections 6-5 or 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997) on contributions it receives from an employer made to it for the purpose of and under the employer's employee share scheme?

Decision

No. The Trustee of the employee share scheme Trust will not be assessed under sections 6-5 or 6-10 of the ITAA1997 on contributions made to it by an employer for the purpose of and under the employer's employee share scheme.

Facts

The employer's employee share scheme complies with the provisions of Division 83A of the Income Tax Assessment Act 1997 (ITAA 1997).

The taxpayer is a Trustee appointed for the purpose of and under the employer's employee share scheme to administer the scheme. The employer contributes amounts to the Trustee for the purpose of and under its employee share scheme.

Reasons for Decision

The funds provided to the Trustee are used in accordance with the Trust Deed and Plan Rules for the sole purpose of and under the employee share scheme. The contributions constitute capital receipts to the Trustee, and are not assessable under sections 6-5 or 6-10 of the ITAA 1997.

Amendment History

Date of Amendment Part Comment
7 August 2018 Facts Repealed Division 13A of the ITAA 1936 replaced with Division 83A of the ITAA 1997, the new employee share scheme provisions.
Year of income Changed to 2010 to enable current provisions to be the relevant provisions.

Date of decision:  21 August 2002

Year of income:  Year ending 30 June 2010

Legislative References:
Income Tax Assessment Act 1997
   section 6-5
   section 6-10

Keywords
Employee share schemes & options
Assessable income
Capital receipts
Trust

Siebel/TDMS Reference Number:  CW3057156; 1-EE84EKF

Business Line:  Private Groups and High Wealth Individuals

Date of publication:  2 October 2002
Date reviewed:  11 May 2018

ISSN: 1445-2782

history
  Date: Version:
  21 August 2002 Original statement
You are here 7 August 2018 Updated statement

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