ATO Interpretative Decision
ATO ID 2002/962 (Withdrawn)
Income Tax
Fringe Benefits Tax - provision of a share or right to an employee by an entity that administers the employee share scheme is not a fringe benefitFOI status: may be released
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This ATO ID is withdrawn from the database due to paragraphs (h) to (hc) of the definition of fringe benefit in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 being substituted by Act 133 of 2009 with effect from 1 July 2009.This document has changed over time. View its history.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the provision of a share or right under an employee share scheme by an entity that administers the employee share scheme to an employee or an associate of the employee not a fringe benefit because of paragraph 136(1)(ha) of the Fringe Benefits Assessment Tax 1986 (FBTAA)?
Decision
The provision of a share or right under an employee share scheme by an entity who administers the employee share scheme to an employee or an associate of the employee is not a fringe benefit because of paragraph 136(1)(ha) of the FBTAA.
Facts
The Employee Share Scheme complies with the provisions of Division 13A of the Income Tax Assessment Act 1936 (ITAA 1936).
An entity is appointed to administer the Scheme. The sole activities of the entity are obtaining shares or rights in the employer company or a holding company of the employer and providing those shares or rights to employees under the employee share scheme. Under the scheme, shares or rights are purchased, registered in the name of the entity and held for the benefit of participating employees until their entitlement. Upon entitlement, the entity distributes the shares or rights to the employees.
Reasons for Decision
The definition of fringe benefit in paragraph 136(1)(ha) states that a benefit is not a fringe benefit where the benefit is constituted by the acquisition of the share or right under an employee share scheme within Division 13A of the ITAA 1936.
The employee acquires a beneficial or legal interest in a share or right, under Subdivision 139G of the ITAA 1936, which deals with acquisition of a share or right within Division 13A of the ITAA 1936.
The benefit, represented by the acquisition of the beneficial or legal interest in a share or right which is provided to the employee by the entity that administers the scheme under the employee share scheme is excluded as a benefit as defined under fringe benefit in paragraph 136(1)(ha) of the FBTAA.
Date of decision: 30 July 2002Year of income: Year ended 30 June 2002 Year ending 30 June 2003 Year ending 30 June 2004
Legislative References:
Income Tax Assessment Act 1936
Division 13A
Section 139G
paragraph 136(1)(ha) Related ATO Interpretative Decisions
ATO ID 2002/966
ATO ID 2002/967
Keywords
Benefit
Excluded benefit
Fringe Benefits Tax
Employee share schemes & options
ISSN: 1445-2782
| Date: | Version: | |
| 30 July 2002 | Original statement | |
| You are here | 23 September 2015 | Archived |