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Edited version of private ruling
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Ruling
Subject: Employee Investment Trust
Question 1
Will the contributions of monies by the Employer to the Trustee pursuant to the Trust Deed be included in the calculation of the net income of the trust estate under section 95 of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
No
Question 2
Will the loans of monies by the Employer to the Trustee pursuant to the Trust Deed be included in the calculation of the net income of the trust estate under section 95 of the ITAA 1936?
Answer
No
Question 3
Will dividends and other income received by the Trustee be included in the calculation of the net income of the trust estate under section 95 of the ITAA 1936?
Answer
Yes
Question 4
Will any part of the net income of the trust estate to which no beneficiary is presently entitled be assessed to the Trustee pursuant to section 99A of the ITAA 1936?
Answer
Yes
Question 5
To the extent that the net income of the trust estate does not include proceeds received on the disposal of investments as ordinary income of the trust estate:
(i) will the proceeds received by the trust estate from the sale of investments be taken into account in calculating its net capital gain under Division 102 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes
(ii) will the sale of investments by the trust estate which had been allocated to units of the Employee constitute a CGT event of the trust estate under Division 104 of the ITAA 1997?
Answer
Yes
(iii) will the proceeds received by the trust estate from the sale of investments allocated to units of the Employee be taken into account in calculating its net capital gain under Division 102 of the ITAA 1997?
Answer
Yes
(iv) where the proceeds received by the trust estate from the sale of investments held by the Trustee for at least 12 months are taken into account in calculating a capital gain of the trust estate under Division 102 of the ITAA 1997, will the capital gain be a discount capital gain under Division 115 of the ITAA 1997?
Answer
Yes
Question 6
Will the cancellation of the Employee's units constitute an acquisition of the cancelled units by the Trustee under section 109-5 of the ITAA 1997?
Answer
No
Question 7
Will the general anti-avoidance provisions under section 67 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) apply to the scheme described?
Answer
No
Question 8
Will the general anti-avoidance provisions under Part IVA of the ITAA 1936 apply to the scheme described?
Answer
No
This ruling applies for the following periods:
Fringe Benefits Tax Year ending 31 March 2010
Income Tax Year ending 30 June 2010
Fringe Benefits Tax Year ending 31 March 2011
Income Tax Year ending 30 June 2011
Fringe Benefits Tax Year ending 31 March 2012
Income Tax Year ending 30 June 2012
The scheme commences on:
29 April 2010
Relevant facts and circumstances
The Employer intends to implement a long term equity plan for the purpose of providing a long term equity incentive structure to deliver equity based benefits to the Employee.
Relevant legislative provisions
Fringe Benefits Tax Assessment Act 1986 Section 67
Income Tax Assessment Act 1936 Section 44
Income Tax Assessment Act 1936 Section 95
Income Tax Assessment Act 1936 Section 97
Income Tax Assessment Act 1936 Section 99A
Income Tax Assessment Act 1936 Subsection 99A(4)
Income Tax Assessment Act 1936 Subsection 99A(4A)
Income Tax Assessment Act 1936 Part IVA
Income Tax Assessment Act 1997 Division 102
Income Tax Assessment Act 1997 Division 104
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 109-5
Income Tax Assessment Act 1997 Division 115