Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-6 - THE IMPUTATION SYSTEM

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Division 208 - Exempting entities and former exempting entities

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Subdivision 208-G - Tax effects of distributions by exempting entities

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Operative provisions

SECTION 208-215 Eligible employee share schemes

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208-215(1)
An individual acquires a beneficial interest in a *share in a company under an *employee share scheme in circumstances that are relevant for the purposes of paragraphs 208-205(b) and 208-235(b) if:

(a) all the *ESS interests available for acquisition under the scheme relate to:

(i) ordinary shares; or

(ii) preference shares to which are attached substantially the same rights as are attached to ordinary shares; and

(b) immediately after the individual acquires the interest:

(i) he or she does not hold a beneficial interest in more than 10% of the shares in the company; and

(ii) he or she is not in a position to control, or to control the casting of, more than 10% of the maximum number of votes that might be cast at a general meeting of the company; and

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(c) the share is not a *non-equity share.

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208-215(2)

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An individual also acquires a beneficial interest in a *share in a company under an *employee share scheme in circumstances that are relevant for the purposes of paragraphs 208-205(b) and 208-235(b) if:

(a) the share is part of a stapled security; and

(b) Subdivision 83A-B or 83A-C (about employee share schemes) applies to the beneficial interest in the stapled security.

208-215(3)

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For the purposes of paragraph (1)(b), you are taken to:

(a) hold a beneficial interest in any *shares in the company that you can acquire under an *ESS interest that is a beneficial interest in a right to acquire a beneficial interest in such shares; and

(b) be in a position to cast votes as a result of holding that interest in those shares.

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History

208-215 substituted by No 133 of 2009, s 3 and Sch 1 item 43, applicable in relation to the ESS interests mentioned in subsections 83A-5(1) and (2) of the Income Tax (Transitional Provisions) Act 1997 . S 208-215 formerly read:

SECTION 208-215 Eligible employee share scheme
208-215(1)
A *share in a company is acquired by a person under an *employee share scheme in circumstances that are relevant for the purposes of paragraph 208-205(b) and 208-235(b) if:

(a) the share is acquired by the person in respect of, or for or in relation directly or indirectly to, any employment of the person by the entity or by an entity that is a *subsidiary of the company; and

(b) all the shares available for acquisition under the scheme are ordinary shares or are preference shares to which are attached substantially the same rights as are attached to ordinary shares; and

(c) immediately after the acquisition of the shares:

(i) the person does not hold a legal or beneficial interest in more than 5% of the shares in the company; and

(ii) the person is not in a position to control, or control the casting of, more than 5% of the maximum number of votes that might be cast at a general meeting of the company; and

(d) the share is not a *non-equity share.

208-215(2)
A *share in a company is acquired by a person under an *employee share scheme in circumstances that are relevant for the purposes of paragraph 208-205(b) and 208-235(b) if the share is part of a stapled security (within the meaning of Division 13A of Part III of the Income Tax Assessment Act 1936 ) that is treated as a *qualifying share because of Subdivision DB of that Division.
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History

S 208-215(2) inserted by No 56 of 2007 , s 3 and Sch 3 items 22 and 23, effective 12 April 2007. No 56 of 2007 , s 3 and Sch 3 item 39 contains the following application provision:

(1)
The amendment applies to acquisitions of stapled securities, and of rights to acquire stapled securities, on or after 1 July 2006.

(2)
In this item:
acquisition
has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .

S 208-215 amended by No 41 of 2005 and inserted by No 90 of 2002.

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