Edited version of private advice

Authorisation Number: 1052147999375

Date of advice: 17 November 2023

Ruling

Subject: Employee shares

Question 1

Will Company A as head company of the income tax consolidated group (the Group) obtain an income tax deduction, pursuant to section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997), in respect of the irretrievable cash contributions made by the Group to Company C (Trustee) as trustee for the Company A Employee Share Trust (the Trust) for Australian employees to fund the subscription for or acquisition from other shareholders of shares in Company A (Company A Shares) by the Trust in respect of the Plans?

Answer

Yes.

Question 2a

Will the Group obtain an income tax deduction under section 8-1 of the ITAA 1997 in respect of costs incurred by the Group in relation to the on-going administration of the Trust for Australian employees?

Answer

Yes.

Question 2b

Will the Group obtain an income tax deduction under either section 8-1 or section 25-5 of the ITAA 1997 in respect of costs incurred by the Group in managing the tax affairs of the Trust for Australian employees?

Answer

Yes.

Question 2c

Will the Group obtain an income tax deduction under section 40-880 of the ITAA 1997 in respect of costs incurred by the Group in relation to the establishment of the Trust for Australian employees?

Answer

Yes.

Question 3a

Will the irretrievable cash contributions made by the Group to the Trustee of the Trust, to fund the subscription for, or acquisition off-market of, Company A Shares by the Trustee to satisfy ESS interests issued pursuant to the Plan for Australian employees, be deductible to the Group under section 8-1 of the ITAA 1997 at the time determined by section 83A-210 of the ITAA 1997, if the contributions are made before the acquisition of the relevant ESS interests by Participants under the Plan?

Answer

Yes.

Question 3b

Will the irretrievable contributions made by the Group to the Trustee of the Trust, to fund the subscription for, or acquisition off market of, Company A Shares by the Trustee to satisfy ESS interests issued pursuant to the Plan for Australian employees, be deductible to the Group under section 8-1 of the ITAA 1997 in the income year when the contributions are made, if the contributions are made in the same income year or in a year that is after the acquisition of the relevant ESS interests by Participants under the Plan?

Answer

Yes.

Question 4

If the Trust satisfies its obligation under the Plans by subscribing for new Company A Shares, will the subscription proceeds be included in the assessable income of the Group under section 6-5 or 20-20 of the ITAA 1997 or trigger a CGT event under Division 104 of the ITAA 1997?

Answer

No.

Question 5

Will the Commissioner seek to make a determination that Part IVA of the ITAA 1936 applies to deny, in part or full, any deduction claimed by the Group in respect of the irretrievable cash contributions made by the Group to the Trustee to fund the subscription for or acquisition from other shareholders of Company A Shares by the Trust?

Answer

No.

Question 6

Will the provision of the following be a Fringe Benefit within the meaning of subsection 136(1) of the FBTAA 1986:

a)            provision of Share Rights under the Plan?

b)            provision of Company A Shares in satisfaction of the exercise of the Share Rights?

Answer

c)            No.

d)            No.

Question 7

Will the irretrievable cash contributions made by the Group to the Trustee, to fund the subscription for or acquisition from other shareholders of Company A Shares, be treated as a fringe benefit within the meaning of section 136(1) of the FBTAA 1986?

Answer

No.

Question 8

Will the Commissioner seek to make a determination that section 67 of the FBTAA 1986 applies to increase the fringe benefits taxable amount to the Group and other employer entities within the Group by the amount of tax benefit gained from irretrievable cash contributions made by the Group to the Trustee, to fund the subscription for or acquisition from other shareholders of Company A Shares?

Answer

No.

Reasons for decision

These reasons for decision accompany the Notice of private ruling for Company A and Company B.

This is to explain how we reached our decision. This is not part of the private ruling.

Legislative references in the following are to provisions of the Income Tax Assessment Act 1997 (ITAA 1997), unless otherwise indicated.

Questions 1 to 5 - application of the single entity rule in section 701-1

The consolidation provisions in Part 3-90 allow certain groups of entities to be treated as a single entity for income tax purposes. Under the single entity rule (SER) in section 701-1 the subsidiary members of an income tax consolidated group are taken to be parts of the head company. As a consequence, the subsidiary members cease to be recognised as separate entities during the period that they are members of the income tax consolidated group with the head company of the group being the only entity recognised for income tax purposes.

The meaning and application of the SER is explained in Taxation Ruling TR 2004/11 Income tax: consolidation: the meaning and application of the single entity rule in Part 3-90 of the Income Tax Assessment Act 1997.

As a consequence of the SER, the actions and transactions of the subsidiary members of Company A income tax consolidated group are treated, for income tax purposes, as having been undertaken by Company A as the head company of the tax consolidated group.

Questions 6 to 8

The SER in section 701-1 has no application to the Fringe Benefits Tax Assessment Act 1986. The Commissioner has therefore provided a ruling to Company B as the employing entity in the Group.

Issue: Employee share schemes - income tax

Question 1

For present purposes, subsection 8-1(1) will allow you to deduct from your assessable income any loss or outgoing to the extent that it is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income. However, pursuant to subsection 8-1(2), you cannot deduct a loss or outgoing to the extent that it is a loss or outgoing of capital, or of a capital nature.

The Group carries on a business of organising small group tours and adventure travel. The Group plans to operate an employee share scheme (ESS) as part of its remuneration strategy.

Under the Plans, the Group will grant Share Rights to employees and make irretrievable contributions to the Trust (in accordance with the Plan Rules and the Trust Deed) which the Trustee will use to acquire Company A Shares (either on-market or by subscription) for allocation to Participants to satisfy their rights.

Incurred in carrying on a business

The Group must provide the Trustee with all the funds required to act as requested (clause XX of the Trust Deed).

The contributions made by the Group are irretrievable and non-refundable to the Group in accordance with the Trust Deed as all funds provided by the Group are not repayable (refer to clause XX of the Trust Deed) and the Trustee may only carry out activities that constitute the management of an employee share scheme plan (refer to subclause XX of the Trust Deed). Additionally, the Trustee agrees that the Trust will be managed and administered so that it satisfies the definition of "employee share trust" contained in subsection 130-85(4) (refer to subclause XX of the Trust Deed).

The Group will grant Share Rights under the Plans as part of its remuneration and reward program for Participants. The costs incurred by the Group for the acquisition of Company A Shares to satisfy Share Rights that arise as part of these remuneration arrangements, and contributions to the Trust are part of an on-going series of payments in the nature of remuneration of its employees.

Not capital or of a capital nature

The costs will be an outgoing incurred for periodic funding of a bona fide employee share scheme for employees of the Group. Costs incurred are likely to be in relation to more than one grant of rights (rather than being one-off). This indicates that the irretrievable contributions to the Trust are ongoing in nature and are part of the broader remuneration expenditure of the Group. While the contributions may secure an enduring or lasting benefit for the employer that is independent of the year-to-year benefits that the employer derives from a loyal and contented workforce, that enduring benefit is considered to be sufficiently small. Therefore, the payments are not capital, or of a capital nature.

Accordingly, the Group will be entitled to deduct an amount under section 8-1 for irretrievable cash contributions it makes to the Trustee of the Trust to acquire Company A Shares to satisfy ESS interests issued pursuant to the Plans.

Question 2a

Section 8-1 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, incurred in producing exempt or non-assessable non-exempt income or where a provision of the tax law prevents the deduction.

The Group carries on a business of XXX to produce assessable income. The Group intends to operate an employee share scheme as part of its remuneration strategy. The Group incurs on-ongoing administration costs for operating the Employee Share Scheme (ESS) such as:

•         employee plan record keeping

•         production and dispatch of holding statements to Participants

•         costs incurred in the acquisition of Company A Shares from other shareholders, such as brokerage costs and the allocation of such Company A Shares to Participants

•         other trustee expenses such as the annual audit of the financial statements and annual income tax return of the Trust.

These costs are regular and recurrent employment expenses which are deductible under section 8-1 as they are costs necessarily incurred in running the ESS while carrying on the Group's business for the purpose of gaining or producing its assessable income.

Relevantly, these costs are not capital or of a capital nature as the loss or outgoings are regular and recurrent and are part of the ordinary employee remuneration costs of the company (as confirmed in Taxation Determination TD 2022/8 Income tax: deductibility of expenses incurred in establishing and administering an 'employee share scheme' (TD 2022/8).

Question 2b

Section 8-1 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature.

Section 8-10 states that if more than one provision applies, the most appropriate provision should be used.

Division 12 sets out particular types of deductions that are dealt with by a specific provision of either the ITAA 1936 or ITAA 1997. Section 25-5 deals with tax-related expenses is such a provision listed in Division 12.

Paragraph 25-5(1)(a) allows a deduction for expenditure incurred in managing your tax affairs. Paragraph 25-5(1)(b) allows a deduction for expenditure incurred for complying with an obligation imposed on you by a Commonwealth law, insofar as that obligation relates to the tax affairs of an entity. An example of the latter case is a public officer of a company who is answerable in respect of the tax affairs of the company and may therefore claim a deduction under paragraph 25-5(1)(b) for costs incurred in relation to the tax affairs of the company (as confirmed by Hill J in Bartlett v FC of T 2003 ATC 4962 at paragraph 58).

Despite being an associated entity, the tax affairs of the Trust are distinct from the Group's own tax affairs and so the Group is not entitled to a deduction under paragraph 25-5(1)(a) for costs it incurs in relation to the Trust's tax affairs. There is no apparent Commonwealth law which obligates the Group to manage the tax affairs of the Trust, rather than the Trust managing its own tax affairs and seeking reimbursement. Accordingly, expenditure incurred by the Group which is related to the tax affairs of the Trust is not deductible to the Group under section 25-5.

However, expenditure incurred by the Group to manage the Trust's tax affairs such as the annual preparation of its income tax return is analogous to the ongoing administration expenses discussed at question 2a. It is regular and recurrent and necessarily incurred in running the ESS while carrying on the Group's business for the purpose of gaining or producing its assessable income. The expenditure is therefore deductible under section 8-1.

Question 2c

Section 40-880 allows a deduction for certain business-related capital expenditure. Limitations and exceptions are in subsections 40-880(3) to (9). Relevantly, the business needs to be carried on for a taxable purpose and as stated above the Group carries on a business of organising small group tours and adventure travel to produce assessable income.

Therefore, as per paragraphs 4 to 9 of TD 2022/8, the implementations costs including the services provided by the Group's accounting, tax and legal advisors and legal and tax fees associated with creating and amending the Trust Deed are deductible to the Group under section 40-880.

Question 3a

Section 83A-210 applies to determine the timing of the deduction, but only in respect of the contribution provided to the trust to purchase shares in excess of the number required to grant the relevant ESS interests to the employees arising in the year of income from the grant of relevant ESS interests, under an employee share scheme. Further information is available in ATO Interpretative Decision ATO ID 2010/103 Income Tax- Employee share scheme: timing of deduction for money provided to the trustee of an employee share trust.

The Plan is an employee share scheme for the purposes of subsection 83A-10(2) as it is a scheme under which ESS interests (i.e. a beneficial interest in a right to acquire a beneficial interest in a share) are provided to employees (i.e., Participants) in relation to their employment with the Group.

However, the Plan also permits the Share Rights to be cash settled. This is discussed below under indeterminate rights.

The Plans contain a number of interrelated components which includes the provision of irretrievable cash contributions by the Group to the Trustee of the Trust. These contributions enable the Trustee to acquire Company A Shares for the purpose of enabling each Participant to acquire ESS interests as per the Plans.

If the irretrievable cash contributions are made before acquisition of the relevant ESS interests, the contribution can only be deducted from the assessable income of the Group in the income year when the relevant beneficial interest in an Company A Share, or beneficial interest in a right to a beneficial interest in an Company A Share, is acquired by a Participant under the Plans.

Indeterminate rights

Share Rights granted under the Plan can be indeterminate rights for the purposes of section 83A-340 where the invitation indicates the right can be settled by either a share or making a payment of a cash equivalent amount. In this circumstance, the Share Right is not a right to acquire a beneficial interest in a share unless and until the time when the Board determines it will be satisfied by the provision of a share.

Once it is determined that it will be satisfied by provision of a share (or the number of shares that the right represents is determined), section 83A-340 operates to treat these Share Rights as though they had always been rights to acquire beneficial interests in shares.

If irretrievable contributions are provided to the Trustee before these Share Rights are acquired (and they do subsequently become ESS interests), then section 83A-340 operates to deem the Share Rights to always have been ESS interests. Where this occurs, section 83A-210 will apply (retrospectively) to modify the timing of the deduction claimed under section 8-1. In such a case, a deduction for the contribution to fund the Share Rights would be available to the Group in the income year in which Participants acquire the Share Rights.

Note, as per the facts, where the Share Rights do not become an ESS interest because they are ultimately satisfied in cash, the outgoing will not flow through the Trust. If they did flow through the Trust, the Trust would not satisfy the sole activities test for the purposes of subsection 130-85(4).

Question 3b

Consistent with the analysis in Question 3a above, where the contribution is made after the acquisition of the relevant ESS interests, irretrievable contributions made by the Group to the Trustee of the Trust to fund the subscription for, or acquisition of off-market Company A Shares (i.e. from existing shareholders) by the Trust to satisfy the ESS interests granted to Participants will be deductible in the income year in which the contribution is made by the Group pursuant to section 8-1. Section 83A-210 will not apply to modify the timing of the deduction as its requirements are not satisfied.

Question 4

Ordinary Income

Section 6-5 provides that your assessable income includes income according to ordinary concepts which is called ordinary income. Receipts of a capital nature do not constitute income according to ordinary concepts, whether or not incurred in carrying on a business. In an ESS, where the trustee subscribes to the company for an issue of shares and pays the full subscription price for the shares, the company receives a contribution of share capital from the trustee. The character of the contribution of share capital received by Company A from the Trustee can be determined by the character of the right or thing disposed of in exchange for the receipt. Here, Company A is issuing the Trustee with new shares in itself. The character of the newly issued share is one of capital. Therefore, the receipt, being the subscription proceeds, takes the character of share capital, and accordingly, is also of a capital nature. This view is supported by the reasoning in ATO Interpretative Decision ATO ID 2010/155 Income Tax - Employee Share Scheme: assessability to an employer of the option exercise price paid by an employee. Accordingly, when Company A receives subscription proceeds from the Trustee where the Trustee has subscribed for new Company A Shares to satisfy obligations to Participants, the subscription proceeds received is a capital receipt. That is, it will not be on revenue account and will not be ordinary income under section 6-5.

Section 20-20

Subsection 20-20(2) provides that if you receive an amount as a recoupment of a loss or outgoing, it will be assessable income if you received it by way of insurance or indemnity and that amount can be deducted as a loss or outgoing in the current year or earlier income year. Company A will receive an amount for the subscription of shares by the Trustee. There is no insurance contract in this case, so the amount is not received by way of insurance. Further, the amount is not an indemnity because the receipt does not arise under a statutory or contractual right of indemnity, and the receipt is not in the nature of compensation. Subsection 20-20(3) establishes that an amount received by you as 'recoupment' of a loss or outgoing is an 'assessable recoupment' if you can deduct the loss or outgoing for an earlier income year under a provision listed in section 20-30. Recoupment is defined in subsection 20-25(1) to include any kind of recoupment, reimbursement, refund, insurance, indemnity or recovery, however described and a grant in respect of a loss or outgoing. The Explanatory Memorandum to the Tax Law Improvement Bill 1997 states that the ordinary meaning of recoupment encompasses any type of compensation for a loss or outgoing. So far as a deduction under section 8-1 allowed for bad debts or rates or taxes is concerned, section 20-30 will apply such that if there was a recoupment of that deduction, that amount would be assessable. However, the receipt by Company A made in return for issuing shares to the Trustee would not be a recoupment of previously deducted expenditure under section 8-1 regarding bad debts or rates and taxes to which section 20-30 could apply. Therefore, the subscription proceeds will not be an assessable recoupment under section 20-20.

Capital Gains Tax

Section 102-20 states that you make a capital gain or loss if and only if a CGT event happens. No CGT events occur when the Trust satisfies its obligations by subscribing for new Company A Shares. The relevant CGT events that may be applicable when the subscription proceeds are received by the Group are CGT events D1 (creating a contractual or other rights) and H2 (receipt for event relating to a CGT asset). However, paragraph 104-35(5)(c) states that CGT event D1 does not happen if a company issues or allots equity interests or non-equity shares in the company. In this case, Company A is issuing shares, being equity interests as defined in section 974-75, to the Trustee, therefore CGT event D1 does not happen. In relation to CGT event H2, paragraph 104-155(5)(c) also states that CGT event H2 does not happen if a company issues or allots equity interests or non-equity shares in the company. Therefore, CGT event H2 does not occur. Since no CGT event occurs, there is no amount that will be assessable as a capital gain to the Group. Therefore, when the Trust satisfies its obligations under the Plans by subscribing for new Company A Shares, the subscription proceeds will not be included in the assessable income of the Group under section 6-5 or section 20- 20, nor trigger a CGT event under Division 104.

Question 5

Part IVA of the ITAA 1936 is a general anti-avoidance provision which gives the Commissioner the power to cancel a 'tax benefit' that has been obtained, or would, but for section 177F, be obtained, by a taxpayer in connection with a scheme to which Part IVA applies.

The Commissioner generally accepts that a general deduction may be available where an employer provides money or other property to an employee share trust where the conditions of Division 83A of the ITAA 1997 are met.

In this case, the scheme does not contain the elements of artificially or unnecessary complexity and the commercial drivers sufficient explain the entry into the use of the employee share trust arrangement.

Therefore, having regard to the eight factors set out in subsection 177D(2), the Commissioner has concluded that the scheme is not being entered into or carried out for the dominant purpose of enabling Company to obtain a tax benefit.

Question 6

An employer's liability to fringe benefits tax (FBT) arises under section 66 of the FBTAA, which provides that tax is imposed in respect of the fringe benefits taxable amount of an employer for the relevant year of tax.

In general terms, a 'fringe benefit' is defined in subsection 136(1) of the FBTAA as being a benefit provided to an employee or an associate of an employee 'in respect of' the employment of the employee. However, certain benefits are excluded from being a 'fringe benefit' by virtue of paragraphs (f) to (s) of the 'fringe benefit' definition.

In particular, paragraph (h) of subsection 136(1) of the FBTAA excludes the following from being a 'fringe benefit':

a benefit constituted by the acquisition of an ESS interest under an employee share scheme (within the meaning of the ITAA 1997) to which Subdivision 83A-B or 83A-C of that Act applies.

The Commissioner accepts that the Plans are an employee share scheme. Specifically, the Commissioner accepts that the Share Rights provided under the Plans are ESS interests and that Subdivision 83A-B or 83A-C applies to those ESS interests as they are provided at a discount.

Accordingly, the provision of Share Rights under the Plans will not be subject to FBT on the basis that they are acquired by Participants under an employee share scheme (to which Subdivision 83A-B or 83A-C will apply) and are thereby excluded from being a fringe benefit by virtue of paragraph (h) of the definition of a fringe benefit in subsection 136(1) of the FBTAA.

In addition, when a Share Right is later exercised, it will not give rise to a fringe benefit as any benefit received would be in respect of the exercise of the option and not in respect of employment (refer ATO Interpretative Decision ATO ID 2010/219 Fringe Benefits Tax Fringe benefit: shares provided to employees upon exercise of rights granted under an employee share scheme).

Therefore, the provision of Company A Shares in satisfaction of the exercise of Share Rights will also not be fringe benefits.

Indeterminate rights under the Plans

At the time the Share Rights are granted under the Plans, it may be unclear if paragraph (h) of the definition of fringe benefit in subsection 136(1) of the FBTAA applies because those Share Rights may be satisfied in cash instead of Company A Shares. Hence, they may not be ESS interests within the meaning of subsection 83A-10(1).

However, where the Share Rights are ultimately satisfied with shares instead of cash, the indeterminate rights will, pursuant to section 83A-340, be treated as if they had always been ESS interests. In these circumstances, they will constitute the acquisition of ESS interests acquired under an ESS within the meaning of subsection 83A-10(2) to which Subdivision 83A-B or 83A-C applies. Accordingly, the Share Rights that are satisfied with shares will be excluded from the definition of a fringe benefit by paragraph 136(1)(h) of the FBTAA.

Where an employee's indeterminate rights are ultimately satisfied with cash instead of shares, the granting of the Share Rights will be viewed as a series of steps in the payment of salary or wages and not a separate benefit to the payment of salary or wages which are excluded from the definition of a fringe benefit by paragraph 136(1)(f) of the FBTAA. This outcome is consistent with ATO Interpretative Decision ATO ID 2010/142 Fringe Benefits Tax Employee share scheme: indeterminate rights not fringe benefits.

Question 7

One benefit excluded from being a 'fringe benefit', pursuant to paragraph (ha) of subsection 136(1) of the FBTAA, is a benefit constituted by the acquisition of money or property by an employee share trust within the meaning of the ITAA 1997.

In examining whether the requirements of subsection 130-85(4) are met, it is the activities of the trustee in relation to a particular trust that is relevant. To qualify as an employee share trust, a trustee's activities must be limited to those described in paragraphs 130-85(4)(a), (b) and (c).

Paragraph 130-85(4)(a) and (b) are satisfied because:

•         the Trust acquires shares in a company, namely Company A; and

•         the Trust ensures that ESS interests as defined in subsection 83A-10(1) (being options/rights/Company A Shares) are provided under an employee share scheme (as defined in subsection 83A-10(2)) by allocating those shares to the employees in accordance with the Deed and the Plans.

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 phrase 'merely incidental' takes its ordinary meaning, with further guidance drawn from the context and purpose of the legislation in which it appears. 'Merely incidental' is not defined in the legislation and has not been judicially considered in the context of subsection 130-85(4). The Macquarie Dictionary defines 'merely' to mean 'only as specified, and nothing more'. 'Incidental' is defined as 'happening or likely to happen in fortuitous or subordinate conjunction with something else'.

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'?

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.

In the present case, the Trust is in line with the definition of an employee share trust under section 130-85(4) because:

•         the Trust acquires shares in a company, namely Company A

•         the sole purpose being the acquisition, holding, and ongoing administration of holding Company A Shares under the Plans for the benefit of the Participants (see Recital A of the Trust Deed).

•         the Trustee may only carry out activities that constitute the management of the Plans established by the Group (see subclause 4.2(a) of the Trust Deed)

•         the Commissioner accepts that the other activities undertaken by the Trustee will be merely incidental to this purpose 130-85(4)(c)

•         the Trust ensures that ESS interests as defined in subsection 83A-10(1) are provided under an employee share scheme (as defined in subsection 83A-10(2)) by allocating those shares to the employees in accordance with the Trust Deed and the Plans

•         the Trust Deed indicates that Company A and the Trustee agree the Trust will be managed and administered so that it satisfies the definition of 'employee share trust' for the purpose of subsection 130-85(4) (Clause 4.8 of the Trust Deed).

Therefore, the cash contribution made by the Group to fund the subscription for or acquisition on-market of Company A Shares by the Trust will not be a fringe benefit.

Question 8

PS LA 2005/24 Application of General Anti-Avoidance Rules explains the application of Part IVA or other general anti-avoidance rules to an arrangement, including the operation of section 67 of the FBTAA (refer to paragraphs 185-191).

The Commissioner would only seek to make a determination under section 67 of the FBTAA if the arrangement resulted in the payment of less fringe benefits tax than would be payable but for entering into the arrangement. Paragraph 191 of PS LA 2005/24 states:

The approach outlined in this practice statement (refer to paragraphs 75 to 150) to the counterfactual and the sole or dominant purpose test in Part IVA is relevant (except that amendments corresponding to the 2013 amendments of Part IVA have not been made to section 67) and should be taken into account by Tax officers who are considering the application of section 67 of the FBTAA.

Irretrievable cash contributions made by Company A or its Australian subsidiaries to the Trust will not be a fringe benefit defined in subsection 136(1) of the FBTAA as explained in the reasons for question 7. As a result, the FBT liability of Company A or its Australian subsidiaries is not any less than it would have been but for the existence of the arrangement.

The Commissioner will not make a determination that section 67 of the FBTAA applies to increase the aggregate fringe benefits amount of Company A or its Australian subsidiaries by the amount of the tax benefit gained from the irretrievable cash contributions made to the Trustee of the Trust to fund the subscription for, or acquisition on market of, Company A Shares.