Edited version of private advice

Authorisation Number: 1052484465732

Date of advice: 5 December 2025

Ruling

Subject: Employee share scheme

Question 1

Will the Company be entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the irretrievable cash contributions it makes to the Trustee to fund the subscription for, or acquisition of, ordinary shares in the Company for the Trust to satisfy ESS interests issued to Australian resident participants pursuant to the Plan?

Answer

Yes

Question 2

Will the Company be entitled to a deduction under section 8-1 of the ITAA 1997 in respect of costs it incurs in relation to the ongoing administration of the Plan?

Answer

Yes

Question 3

Will section 83A-210 of the ITAA 1997 apply to modify the income year in which the Company can claim a deduction under section 8-1 of that Act for the irretrievable cash contributions it makes to the Trustee to fund the subscription for, or acquisition of, ordinary shares in the Company if the contributions are made before Participants of the Plan acquire the relevant ESS interests?

Answer

Yes

Question 4

Where the Trustee satisfies its obligation under the Plan by subscribing for new shares in the Company, will the subscription proceeds be included in the assessable income of the Company under section 6-5 or section 20-20 of the ITAA 1997, or trigger a CGT event under Division 104 of that Act?

Answer

No

Question 5

Will the Commissioner seek to make a determination under section 177F of the Income Tax Assessment Act 1936 (ITAA 1936) that Part IVA of that Act applies to deny, in part or in full, any deduction claimed by the Company for the irretrievable cash contributions it makes to the Trustee to fund the subscription for, or acquisition of, ordinary shares in the Company pursuant to the Plan?

Answer

No

Question 6

Will the provision of Shares or Restricted Stock Units to the Australian resident employees of the Company or Subsidiary Co under the Plan constitute a 'fringe benefit' within the meaning of that term in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer

No

Question 7A

Will the irretrievable cash contributions made by the Company to the Trustee under the Trust's deed to fund the subscription for, or acquisition of, ordinary shares in the Company constitute a 'fringe benefit' within the meaning of that term in subsection 136(1) of the FBTAA?

Answer

No

Question 7B

Will the irretrievable cash contributions made by the Company to the Trustee under the Trust's deed (as amended by the deed of amendment), to fund the subscription for, or acquisition of, ordinary shares in the Company, constitute a 'fringe benefit' within the meaning of that term in subsection 136(1) of the FBTAA?

Answer

No

Question 8

Will the Commissioner seek to make a determination that section 67 of the FBTAA applies to include an amount in the aggregate fringe benefits amount of the Company or Subsidiary Co by the amount of tax benefit gained from the irretrievable cash contributions made to the Trustee, to fund the subscription for, or acquisition of, ordinary shares in the Company pursuant to the Plan?

Answer

No

This ruling applies for the following periods:

For Questions 1 to 5, income years ending 30 June 20XX to 30 June 20YY

For Questions 6, 7A, 7B and 8, FBT years ending 31 March 20XX to 31 March 20YY

The scheme commenced on:

In a particular income year

Relevant facts and circumstances

The Company is a company that was incorporated in Australia with its ordinary shares listed on the Australian Securities Exchange.

The Company is an Australian resident for income tax purposes and is the head company of a consolidated group.

The Company and Subsidiary Co are employer entities of the consolidated group.

The Company derives assessable income from its business activities.

The Company operates an employee share scheme as part of its remuneration and reward program for the group's employees (the Plan). The Plan is governed by the Plan Rules.

Under the Plan, Participants are granted Restricted Stock Units to acquire shares in the Company for no consideration. The Restricted Stock Units are subject to vesting conditions until the relevant vesting date. Upon vesting, the Participants may exercise their right and receive the relevant number of shares in the Company.

The Company will make cash contributions to the Trustee from time to time to fund the acquisition of shares in the Company. These contributions are irretrievable and non-refundable because the Company and its subsidiaries are not beneficiaries of the Trust and are not entitled to any part of the Trust's fund (including shares held by the Trust). The cash contributions form part of the corpus of the Trust.

The Company will incur costs associated with the services provided by the Trustee in respect of the ongoing administration and management of the Trust.

Relevant legislative provisions

Section 177F of the Income Tax Assessment Act 1936

Section 6-5 of the Income Tax Assessment Act 1997

Section 8-1 of the Income Tax Assessment Act 1997

Section 20-20 of the Income Tax Assessment Act 1997

Section 83A-210 of the Income Tax Assessment Act 1997

Division 104 of the Income Tax Assessment Act 1997

Section 67 of the Fringe Benefits Tax Assessment Act 1986

Subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986

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