Edited version of private advice

Authorisation Number: 10522414310872

Date of advice: 7 May 2024

Ruling

Subject: Employee share scheme

Question 1a

Will capital gains tax (CGT) event E5 of section 104-75 of the Income Tax Assessment Act 1997 (ITAA 1997) happen for the Trustee as trustee for the Company A Trust (Trust) at the time a Participant becomes absolutely entitled to the fully paid ordinary shares in Company A (Shares) under the Company A Plan A and Company A Plan B (Plans)?

Answer

Yes.

Question 1b

If CGT event E5 does happen, will a capital gain or loss made by the Trustee be disregarded under section 130-90 of the ITAA 1997 if the Participant acquires the Shares for the same or less than the cost base of the shares in the hands of the Trustee?

Answer

Yes.

This ruling applies for the following period:

Income tax years ending 30 June 20XX to 30 June 20XX

The scheme commenced on:

XX July 20XX

Relevant facts and circumstances

Background

Company A is an Australian public company.

Company A is the head company of the Company A income tax consolidated group (Company A TCG).

Company B is the head company of the Company B income tax consolidated group (Company B TCG) and Company A is Company B's parent company.

The Plans

Company A established Plan A and Plan B to provide eligible employees of the Company A Group holding senior executive roles with incentive to contribute to superior company performance for the benefit of all Company A shareholders (collectively, the Plans, or Plan Rules).

The Plans are administered by Company A's board of directors (the Board) or by any persons to whom the Board delegates any of its power of discretions to under the Plan Rules.

Where Participants are granted Incentive Rights under the Plans, subject to certain conditions being satisfied, this will entitle Participants to receive Shares in Company A.

Offer

In its discretion, the Board may, nominate any Employee for participation in the Plan and determine the number of Incentive Rights to be offered to the Employee, in the form of a:

• Performance Right: being an Incentive Right which has conditions relating to the performance of Company A or the Company A Group or Participant
• Retention Right: being an Incentive Right which has conditions relating solely to the continued employment of an Employee during a period of assessment (Vesting Period)
• STI Right: being an Incentive Right which is granted to a Participant following achievement of certain short term incentive right hurdles based on the performance of Company A, the Company A Group, any member of the Company A Group or a Participant (as part of that Participant's short term incentive payment).

An invitation to participate in the Plan (Invitation) may be made by the Board at any time, in any form, and on any conditions, or subject to any restrictions as the Board decides.

The Invitation must be in writing and include:

• the name of the Employee
• a description, and the number of Incentive Rights offered
• the type of Incentive Rights offered
• the terms (including any conditions and restrictions) determined by the Board
• the time by which, and the manner in which, the Invitation is to be accepted
• the date on which the Incentive Rights will be granted to a Participant who accepts the Invitation (Grant Date).

After the acceptance of an Invitation by the Participant, Company A must, subject to any conditions set out in the Invitation:

• grant the number and type of Incentive Rights specified in the Invitation to the Participant on the Grant Date
• record the Participant as entitled to the number of Incentive Rights granted.

Where a Participant accepts an Invitation and is granted Incentive Rights, that Participant will be bound by the Plan Rules or the Global Plan Rules (as the case may be), and any terms, conditions and restrictions specified in the Invitation.

An Invitation is not transferable, and an Employee may only accept an offer of Incentive Rights in the Employee's name and not on behalf of any other person unless the Invitation provides that the offer may be renounced in favour of and accepted in the name of a Nominee who must be a related person.

A Participant may not:

• dispose of an Incentive Right (or grant any security interest or option or swap over it), and, or
• transfer, encumber or otherwise deal with (including by way of hedging activities which includes any dealing in a derivative instrument intended to "lock in" profit related to, or any other transaction intended to limit the economic risk of holding) an Incentive Right.

Rights Attaching to Incentive Rights

The grant of an Incentive Right does not confer any right or interest, whether legal or equitable, in a Share until the Vesting Conditions in respect of such Incentive Right have been satisfied or waived by the Board at its discretion, so that the Incentive Right has vested.

Until such time the Vesting Conditions attached to an Incentive Right is satisfied or waived by the Board in its discretion, that Incentive Right is an Unvested Incentive Right.

Vesting Conditions

Vesting Conditions is the criteria determined by the Board for:

• assessing the performance of Company A and/ or a Participant in relation to a Performance Right, or
• assessing or satisfying any other condition specified by the Board as a pre-condition to vesting for the purpose of and in accordance with rule 7 in relation to an STI Right or a Retention Right.

An Invitation must specify the Vesting Conditions applicable to a grant of Incentive Rights.

Subject to the Plan Rules, the Board may at any time by written notice to a Participant (Vesting Notice):

• vary or waive a Vesting Condition
• determine whether a Vesting Condition in respect to some or all of a Participant's Incentive Rights have been satisfied.

When an Incentive Right has vested, it becomes a Vested Incentive Right. As soon as possible after the date the Incentive Right has vested, the Board will give a Vesting Notice to the Participant which will contain details of the number of Vested Plan Shares that have vested. Those Vested Plan Shares will be allocated to the Participant in the Trust.

Dealing Restrictions

Where Vested Plan Shares are held in the Trust, or are subject to a holding lock, until the Trustee transfers Vested Plan Shares to a Participant or any holding lock ceases or is removed, the Participant may not:

• dispose of (or grant any security interest or option or swap over) those Vested Plan Shares (or require the Trustee to do so), and, or
• transfer, encumber or otherwise deal with (including by way of hedging activities which includes any dealing in a derivative instrument intended to "lock in" profit related to, or any other transaction intended to limit to economic risk of holding) those Vested Plan Shares (or require the trust to do so), including the Participant's beneficial interest in those Vested Plan Shares.

Company A and the Trustee may implement any procedure they consider appropriate to restrict the Participant from disposing of any Vested Plan Shares that are subject to restrictions under the Plan Rules.

Subject to any Applicable Law and the Plan Rules, a Participant may request the Trustee to transfer a Vested Plan Share to the Participant on or at any time after the Vesting Date (Withdrawal Notice).

Upon receipt of a Withdrawal Notice, the Trustee will transfer Shares as requested, provided that it first receives confirmation from Company A that the Participant has complied with all relevant terms and conditions of issue and such transfer is permitted. Until any such transfer, the Trustee will retain possession of and remain registered as the holder of any Vested Plan Shares.

Lapse or Forfeiture

A Participant will automatically forfeit his or her interest in an Incentive Right if:

• a Vesting Condition in relation to some or all of a Participant's Incentive Rights is not satisfied
• the period or periods (if any) for satisfaction of that Vesting Condition have expired.

The Board may deem any Unvested Incentive Rights held by the Participant to have lapsed or any Vested Plan Shares already held by, or on behalf, of the Participant to be forfeited, if in the opinion of the Board, a Participant:

• acts fraudulently or dishonestly
• breaches his or her duties or obligations, or any policy or code of conduct to the Company A Group
• violates any law or regulation or governmental or judicial order
• steals, misappropriates, embezzles, or wrongfully converts assets or diverts opportunities of the Company A Group
• wrongfully discloses any confidential information of the Company A Group
• undertakes any action which has or may affect the reputation or standing of the Company A Group or bring the Company A Group or its directors or management into disrepute
• undertakes any other action which the Board determines should give rise to a lapse or forfeiture under the Plan Rules.

Where, in the opinion of the Board, a Participant's Incentive Rights vest (or may vest) as a result of fraud, dishonesty, breach of obligations or improper conduct of another employee of the Company A Group and, in the opinion of the Board, the Incentive Rights would not otherwise vest (or have vested), then the Board may determine that the Incentive Rights have not vested (or will not vest) and may determine:

• where the Incentive Rights have not yet vested or Shares have not been allocated upon exercise of an Incentive Right, that the Incentive Rights have not vested and reset any Vesting Conditions applicable to the Incentive Rights
• where Vested Plan Shares are already held by, or on behalf of, the Participant, that the Vested Plan Shares are forfeited by the Participant and may, at the discretion of the Board, reissue any number of Incentive Rights to the Participant subject to new Vesting Conditions in place of the forfeited Vested Plan Shares.

The Trust

On XX March 20XX, Company A established the Trust under a deed entered between Company A and the Trustee.

The Trust Deed has been amended to align more closely with tax guidance issued by the Australian Taxation Office related to employee share trusts and schemes.

The Trustee is an independent third party.

The Trust Deed states that the objective and activities of the Trust are limited to managing the Plans, operating solely for the purpose of subscribing for, purchasing or otherwise acquiring, allocating, holding and delivering Shares under the Plan for the benefit of Eligible Employees.

Subject to the Trust Deed and in accordance with the objects of the Trust, the Trustee's powers include the ability to:

• enter into and execute all contracts, deeds and other documents
• subscribe for, purchase or otherwise acquire Shares, rights or privileges
• sell or otherwise dispose of Shares, Vested Plan Shares, rights or privileges
• receive dividends or distributions on Shares or Vested Plan Shares and to apply those amounts
• sell or transfer Shares or Vested Plan Shares and apply the proceeds of sale
• sell any rights relating to Shares or Vested Plan Shares and apply the proceeds of sale
• delegate the exercise of all or any of the rights, powers or discretions and execute any power of attorney or other instrument necessary to affect that delegation
• employ or engage, and at its discretion, remove or suspend custodians, trustees, manager, employees or other agents and determine the powers and duties to be delegated to them, and pay any remuneration to them as it thinks fit
• rely on any document provided by a Participant, the form of which has been approved by Company A, whether signed by the Participant or otherwise
• take and act upon advice or any opinion of any legal practitioner or other professional adviser without being liable in respect of act done in accordance with such advice or opinion
• open and operate any bank account, retain on current or deposit account at any bank any money which it considers proper, and making regulation including the signing and endorsing of cheques with accounts
• undertake activities that involve bookkeeping, preparing financial, tax and regulatory statements and other recording-keeping and administrative actions necessary to operate the Trust
• borrow money for purpose of acquiring Shares or rights in Company A where no security is provided over the assets of the Trust and the interest payable on such a loan is not more than arm's length commercial rates
• do all acts and things which the Trustee in its discretion considers necessary or expedient for administration, maintenance and preservation of the Trust and the Fund in accordance with the Trust Deed and in the performance of its obligations.

Funding

Company A and Company B make irretrievable cash contributions to the Trustee in relation to Australian employees of their respective tax consolidated groups, who participate in Company A's employee share plans.

Company A is responsible for the on-going and recurrent costs associated with administering the Trust, including:

• brokerage fees
• accounting and audit fees
• tax compliance costs
• bank charges
• record keeping fees.

Company A will pay to the Trustee from Company A's own resources such fees and reimburse such expenses incurred by the Trustee as Company A and the Trustee agree from time to time. The Trustee is entitled to retain for its own benefit any such fee or reimbursement. The Trustee is not entitled to receive from the Account any fees, commission, or other remuneration in respect of its office The Trustee is not entitled to receive from the Trust or any Participant any fees or other remuneration in respect of its office other than reasonable disbursements including brokerage and tax levied or incurred in connection with the Trust.

The Trustee must open and maintain an account in respect of a Participant which contains a written record of the Vested Plan Shares held by the Trustee on behalf of a Participant (Account).

Each Account must record the number, date of acquisition and price of Vested Plan Shares, and the number of bonuses issued to a Participant in respect of its Vested Plan Shares (Bonus Shares).

The Trust shall be administered in a way that satisfies the definition of 'employee share trust' for the purposes of subsection 130-85(4) of the ITAA 1997.

Neither the Trustee nor Company A may use as security Shares or Vested Plan Shares held by the Trustee.

Nothing in the Trust Deed confers or is intended to confer on Company A any charge, lien or any other proprietary or beneficial interest in the Shares acquired by the Trustee under the Trust Deed. Company A and all of the entities deemed to be controlled by Company A are prohibited from benefiting under the Trust Deed and are not eligible to acquire a beneficial interest in the Shares held by the Trust.

Acquisition and allocation of Shares

The Trustee may, upon direction by Company A, acquire Shares from time to time. These Shares may be held for the purpose of granting Vested Plan Shares to Participants from time to time, including at some future point in time and are to be funded prior to settlement of their acquisition either from the Fund or by a payment from Company A or Company B to the Trustee. All funds provided to the Trustee by Company A or Company B shall be irretrievable cash contributions to the Fund.

Shares subscribed for or acquired are to be registered in the name of the Trustee on subscription or acquisition and are considered to be Trust property to be held subject to the Trust Deed.

The Trustee must allocate Vested Plan Shares to the Account established for a Participant under the terms of the Plan Rules in accordance with written directions from Company A provided the Trustee holds sufficient Shares in the Fund or receives sufficient payment from Company A or Company B to acquire the relevant Shares:

• in the ordinary course of trading (or otherwise) on a financial market
• by subscribing for new Shares on such terms (including the issue price (if any)) determined by Company A.

Subject to Applicable Law, if the Trustee holds Vested Plan Shares on behalf of any Participant:

• the Participant may direct the Trustee in writing, to vote on their behalf and how to exercise their voting rights
• the Trustee must only exercise voting rights attached to the Participant's Vested Plan Shares in accordance with the Participant's directions.

Subject to the Trust Deed, the Applicable Law and the Plan Rules:

• a Participant is entitled to receive all Cash Dividends paid in respect of their allocated Vested Plan Shares
• the Trustee must pay all Cash Dividends received in respect of Vested Plan Shares to the relevant Participant without deductions.

Subject to the Trust Deed and the Plan Rules, a Participant is entitled to any Bonus Shares, being Shares which accrue in respect of their Vested Plan Shares held by the Trustee, and are issued to that Participant, as part of a bonus issue.

Bonus Shares must be held by the Trustee on the terms and conditions of the Trust Deed, on behalf of the relevant Participant, who will be the beneficial owner of the Bonus Shares.

Upon allotment to the Trustee, Bonus Shares:

• are deemed to be Vested Plan Shares for the purposes of the Trust Deed
• will be deemed to be acquired on a date determined by Company A.

Rights issues

Subject to the Plan Rules, the Trustee must notify a Participant in writing of any rights to acquire Shares or securities issued, or to be issued, by Company A (Share Rights) which accrue to their allocated Vested Plan Shares.

The Participant may provide the Trustee with written instructions to either:

• sell some or all of the Share Rights to the extent those Share Rights are renounceable and to the extent permitted by the Applicable Law
• acquire some or all of the securities in Company A to which the Share Rights relate to the extent permitted by the Applicable Law.

If a Participant does not give written instructions under the Trust Deed, the Trustee is entitled to sell the Share Rights.

In accordance with the Trust Deed, regardless of whether instructed by the Participant or not, the Trustee:

• must pay to the Participant the proceeds of the sale after deduction of the costs and expenses
• has no obligation to maximise the sale price of the Share Rights
• may aggregate Share Rights to be sold
• may attribute to a sale price to each Share Right sold equal to the average price for each Share Right sold.

If the Trustee acquires a specified number of securities pursuant to the Share Right on behalf of the Participant. The Trustee must transfer those securities to the Participant.

Where the Trustee holds Shares that are not Vested Plan Shares, the Trustee may at the price and otherwise on the terms determined by the Trustee:

• sell any of the Shares on the ASX or by private treaty at the price and otherwise on the terms determined by the Trustee, provided that the Trustee may not engage in trading activities in relation to Shares other than purchasing and selling Shares to satisfy obligations under the Plan Rules
• in respect of Shares, participate in new issues of securities such as bonus issues or entitlement issues, subject in all cases to clause 4.1 of the acquisition
• if Company A offers to buy back any Shares from shareholders generally, accept the offer on terms consistent with those applicable to shareholders generally, provided that the Trustee may not engage in trading activities in relation to Shares other than purchasing and selling Shares to satisfy obligations under the Plan Rules.

The balance of the Net Income of the Trust for a Year of Income to which no Participant is presently entitled to may be accumulated by the Trustee as an Accretion to the Trust.

The Trustee must not vote in respect of any Shares which are not Vested Plan Shares.

Income and capital distributions

Subject to the Plan Rules, a Participant is presently entitled to so much of the Net Income of the Trust for a Year of Income which is attributable to:

• the Vested Plan Shares held by the Trustee on behalf of the Participant
• the proceeds of sales arising from any sale of Vested Plan Shares by the Trustee on behalf of the Participant
• transactions or events related to the Vested Plan Shares or distributions arising from Vest Plan Shares held by the Trustee on behalf of the Participant.

The balance of the Net Income for a Year of Income to which no Participant is presently entitled may be applied, in whole or in part:

• to meet any reasonable costs and expenses incurred by the Trustee in the execution or purported execution of the Trust or any powers, authorities or discretions vested in the Trustee (including, but not limited to, administration, trust, financial and audit expenses)
• to acquire Shares in accordance with the Plan Rules.

Subject to the Trust Deed and Plan Rules, the Trustee may apply any income received by the Trustee in relation to any:

• Shares or other Fund assets in which the Trustee has an equitable interest and to which no Participant is presently entitled to, to acquire Shares in accordance with the Trust Deed, and to meet the reasonable costs and expenses incurred by the Trustee to administer the Trust
• Vested Plan Shares it holds on behalf of a Participant in the manner directed by the Participant.

Reasons for decision

Issue1: Income Tax

Question1a

Summary

CGT event E5 will happen to the Trustee in relation to Shares held by the Trustee under the Plans at a time when a Participant becomes absolutely entitled to those Shares under the terms of the Plans.

Detailed reasoning

Subsection 102-5(1) states that your assessable income includes your net capital gain (if any) for the income year. Under section 102-20, an entity can make a capital gain or loss if, and only if, a CGT event happens.

Participants become absolutely entitled to a Share under the Plans - CGT event E5

Under subsection 104-75(1), CGT event E5 happens if a beneficiary becomes absolutely entitled to a CGT asset of a trust (except a unit trust or a trust to which Division 128 applies) as against the trustee.

The time of the event is when a beneficiary becomes absolutely entitled to the asset (subsection 104-75(2)).

If CGT event E5 happens, the trustee may make a capital gain or loss if the market value of the asset, at the time of the event, is more than its cost base or less than the asset's reduced cost base respectively (subsection 104-75(3)).

In the present case, the Trust is neither a unit trust nor a deceased estate to which Division 128 applies.

Subsection 130-85(2) treats a beneficiary as absolutely entitled to the relevant share from the time of acquisition of the ESS interest until they no longer have an interest in the share. Subsection 130-85(2) only applies if the following requirements under subsection 130-85(1) are satisfied:

(a)  the beneficiary acquires an ESS interest under an employee share scheme

(b)  Subdivision 83A-B or 83A-C applies to the ESS interest, and

(c)   the ESS interest is, or arises because of, an interest the beneficiary holds in an employee share trust (EST)

Participants acquire ESS interests under the Plans which are employee share schemes (paragraph 130-85(1)(a))

An 'employee share scheme' is defined in subsection 83A-10(2) as a scheme under which 'ESS interests' in a company are provided to employees of the company, or a subsidiary of the company, in relation to the employees' employment.

Subsection 83A-10(1) defines an 'ESS interest', in a company, as a beneficial interest in a share in the company or a right to acquire a beneficial interest in a share in the company.

Paragraph 130-85(1)(a) is satisfied as:

•         the Participants to the Plans are beneficiaries of the Company A Trust which was established for the purpose of administering the Plans

•         the Participants are granted Incentive Rights under the Plans which provides them with a right to acquire Shares and therefore the Participants acquire 'ESS interests', as defined by subsection 83A-10(1))

•         the Plans each constitute a scheme under which Participants are granted Incentive Rights in relation to their employment that provides them with the right to acquire shares in Company A and therefore each constitute an 'employee share scheme' (as defined in subsection 83A-10(2)).

Subdivision 83A-B or 83A-C applies to the Incentive Rights (paragraph 130-85(1)(b))

Subsection 83A-20(1) is the key condition that an ESS interest must meet for Subdivision 83A-B or 83A-C to apply. Subsection 83A-20(1) states:

"This Subdivision applies to an ESS interest if you acquire the interest under an employee share scheme at a discount."

As Incentive Rights are granted to Participants of the Plans for no consideration, they are acquired by those Participants at a discount and Subdivision 83A-B would apply to those ESS interests (unless the conditions in subsection 83A-105(1) are satisfied, in which case Subdivision 83A-C would apply instead). Therefore, paragraph 130-85(1)(b) is satisfied.

The ESS interest arises because of an interest you hold in an employee share trust (paragraph 130-85(1)(c))

As outlined above, the Incentive Rights granted to Participants under the Plans constitute an ESS interest, as defined, as they provide Participants with an interest in the Shares held in the Trust.

Section 995-1 defines 'employee share trust' as having the meaning given by subsection 130-85(4).

Subsection 130-85(4) provides that an EST for an employee share scheme (having the meaning given by subsection 83A-10(2)) is a trust whose sole activities are:

(a)  obtaining shares or rights in a company; and

(b)  ensuring that ESS interests in the company that are beneficial interests in those shares or rights are provided under the employee share scheme to employees, or to associates of employees, of:

(i)            the company; or

(ii)           a subsidiary of the company; and

(c)   other activities that are merely incidental to the activities mentioned in paragraphs (a) and (b).

Paragraphs 130-85(4)(a) and (b) of the definition of an EST are satisfied because the Trustee:

• acquires Shares in Company A
• ensures those Shares (which are ESS interests under subsection 83A-10(1)), are provided under the Plans (each being an 'employee share scheme' as defined in subsection 83A-10(2)) to Participants (who are employees of the Company A TCG or Company B TCG) by allocating those shares to the Participants in accordance with the Trust Deed and the rules of the Plans.

Undertaking the activities mentioned in paragraphs 130-85(4)(a) and 130-85(4)(b) will also require that the Trustee undertake incidental activities that are a function of managing the Trust.

Paragraph 130-85(4)(c) provides that a trustee can engage in activities that are merely incidental to those described in paragraphs 130-85(4)(a) and (b).

The Commissioner's views on the types of activities that are merely incidental and not merely incidental are set out in Taxation Determination TD 2019/13: Income tax: what is an 'employee share trust'?

Whether the Trust is an employee share trust for the purposes of subsection 130-85(4) requires an analysis of what the Trustee actually does, not only the powers and duties that are prescribed in the Trust Deed.

Activities that result in employees being provided with additional benefits (such as the provision of financial assistance, including a loan to acquire the shares) are not considered to be merely incidental.

Based on the available facts, the Trust Deed contains powers and duties that are merely incidental to the functions of the Trustee as required by paragraph 130-85(4)(c).

Therefore, the Commissioner considers the Trust to be an EST based on the terms of the Trust Deed and paragraph 130-85(1)(c) is satisfied.

As all of the conditions in subsection 130-85(1) are satisfied, CGT event E5 is the CGT event that will apply under the terms of the Plans at the time that Participant becomes absolutely entitled to the Shares as against the Trustee.

Question1b

Summary

A capital gain or loss that arises to the Trustee at the time when CGT event E5 happens in relation to Shares held by the Trustee under the Plans will be disregarded under section 130-90 if the Participants acquire the Shares for the same or less than the cost base of the shares in the hands of the Trustee.

Detailed reasoning

Exemptions under section 130-90

Subject to subsection 130-90(2), any capital gain or capital loss that the Trustee makes, if CGT event E5 happens, is disregarded if subsection 130-90 applies.

Shares held to satisfy the future exercise of rights acquired under employee share schemes: subsection 130-90(1)

Subsection 130-90(1) applies to disregard any capital gain or loss made by an employee share trust if all of the following apply:

• the CGT event is CGT event E5 or E7 (paragraph 130-90(1)(a))
• the CGT event happens in relation to a share (paragraph 130-90(1)(b))
• the beneficiary had acquired a beneficial interest in the share by exercising a right (paragraph 130-90(1)(c))
• the beneficiary's beneficial interest in the right was an ESS interest to which Subdivision 83A-B or 83A-C (about employee share schemes) applied (paragraph 130-90(1)(d)).

As stated above in response to Question 1a, CGT event E5 happens under the terms of the Plans when the Participant becomes absolutely entitled to Shares as against the Trustee. Under subsection 130-85(2), Participants are taken to be absolutely entitled to the Shares held by the Trustee from the time they were granted the Incentive Right under the terms of the Plans.

Therefore, paragraph 130-90(1)(a) will be satisfied.

Paragraph 130-90(1)(b) is satisfied as CGT event E5 happens in relation to a Share, being a share in the capital of Company A held by the Trustee to which a Participant is absolutely entitled upon the vesting (or exercise if applicable) of an Incentive Right granted under the Plans. Paragraph 130-90(1)(c) is satisfied as a Participant will have acquired a beneficial interest in a Share on the vesting of an Incentive Right, and if applicable, by exercising a Vested Incentive Right, in accordance with the Plans.

Paragraph 130-90(1)(d) is satisfied because as stated above:

• the Plans are employee share schemes for the purpose of Division 83A under which ESS interests are provided to Participants in relation to their employment
• Subdivision 83A-B or 83A-C will apply, as Participants may acquire Incentive Rights under the Plans at a discount.

Accordingly, all the conditions in subsection 130-90(1) have been satisfied.

As all of the conditions in subsection 130-90(1) are satisfied, any capital gain or capital loss that arises for the Trust at the time when CGT event E5 happens will be disregarded if the Shares are acquired by the employee for the same or less than the cost base of the Shares in the hands of the Trust.

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