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Edited version of private advice
Authorisation Number: 1051960651135
Date of advice: 10 March 2022
Ruling
Subject: Employee share scheme - temporary resident
Question
Will any capital gain or loss made from the disposal of your shares in the Company granted under a qualifying 'Start-up' Employee Share Scheme be disregarded where you are a temporary resident?
Answer
Yes. Under the employee share scheme (ESS) start-up rules in section 83A-33 of the ITAA 1997, the discount on eligible ESS interests is not taxed under the ESS regime; instead, any gain or loss on disposal of the rights or shares is assessed under the capital gains tax regime.
Section 768-915 of the ITAA 1997 applies if you are a temporary resident so that a capital gain or capital loss you make from a CGT event is disregarded where the CGT event happens in relation to a CGT asset that is not taxable Australian property.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are a citizen of a foreign country.
You were granted a temporary visa which allowed you to work in Australia.
You arrived in Australia several years ago.
You are not an Australian resident within the meaning of the Social Security Act 1991.
You do not have a spouse.
Since your arrival in Australia, you have been employed by a Company.
You participated in the Company's Employee Option Plan and were granted share options in the Company.
The Company advised you in the offer letter that the share options granted to you would qualify for the 'Start-Up' Employee Share Scheme concessions in section 83A-33 of the Income Tax Assessment Act 1997 (ITAA 1997).
The interest you acquired in the Company under the share option plan is not a direct or indirect interest in Australian real property for the purposes of Division 855 of the ITAA 1997.
You sold some shares acquired under the option plan.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 83A-33
Income Tax Assessment Act 1997 Section 768-915
Income Tax Assessment Act 1997 Division 855
Income Tax Assessment Act 1997 Section 995-1