INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-40 - RULES AFFECTING EMPLOYEES AND OTHER TAXPAYERS RECEIVING PAYG WITHHOLDING PAYMENTS  

Division 83A - Employee share schemes  

Subdivision 83A-C - Deferred inclusion of gain in assessable income  

Main provisions

SECTION 83A-120   ESS deferred taxing point - rights to acquire shares  

Scope

83A-120(1)  
This section applies if the *ESS interest is a beneficial interest in a right to acquire a beneficial interest in a *share. Meaning of ESS deferred taxing point

83A-120(2)  
The ESS deferred taxing point for the *ESS interest is the earliest of the times mentioned in subsections (4) to (7).

83A-120(3)  
However, the ESS deferred taxing point for the *ESS interest is:


(a) the time you dispose of the ESS interest (other than by exercising the right); or


(b) if you exercise the right - the time you dispose of the beneficial interest in the *share;

if that time occurs within 30 days after the time worked out under subsection (2).

No restrictions on disposing of right

83A-120(4)  
The first possible taxing point is the earliest time when:


(a) you have not exercised the right; and


(b) there is no real risk that, under the conditions of the *employee share scheme, you will forfeit or lose the *ESS interest (other than by disposing of it, exercising the right or letting the right lapse); and


(c) if, at the time you acquired the ESS interest, the scheme genuinely restricted you immediately disposing of the ESS interest - the scheme no longer so restricts you. Cessation of employment

83A-120(5)  
The 2nd possible taxing point is the time when the employment in respect of which you acquired the interest ends. Maximum time period for deferral

83A-120(6)  


The 3rd possible taxing point is the end of the 15 year period starting when you acquired the interest. No restrictions on disposing of a share after exercising the right

83A-120(7)  
The 4th possible taxing point is the earliest time when:


(a) you exercise the right; and


(b) (Repealed by No 105 of 2015)


(c) there is no real risk that, under the conditions of the scheme, after exercising the right, you will forfeit or lose the beneficial interest in the *share (other than by disposing of it); and


(d) if, at the time you acquired the ESS interest, the scheme genuinely restricted you immediately disposing of the beneficial interest in the share if you exercised the right - the scheme no longer so restricts you.


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