Youfoodz Holdings Limited - employee share scheme - shares disposed of under scheme of arrangement
Please note that the PDF version is the authorised version of this ruling.
|Table of Contents||Paragraph|
|What this Ruling is about|
|Who this Ruling applies to|
|When this Ruling applies|
|Appendix - Explanation|
Relying on this Ruling
This publication (excluding appendix) is a public ruling for the purposes of the Taxation Administration Act 1953.
If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.
1. This Ruling sets out the income tax consequences for employees of Youfoodz Holdings Limited (Youfoodz) who acquired ordinary shares under the Employee Gift Offer or the Exempt Share Awards (collectively referred to as the Plan Shares) which were subsequently disposed of pursuant to the scheme of arrangement on 27 October 2021 (Scheme of Arrangement).
- acquired Plan Shares in Youfoodz which you held at all times until 27 October 2021
- were entitled to reduce the amount included in your assessable income in accordance with section 83A-35 (with the exception of the condition in subsection 83A-45(4) - minimum holding period) when you acquired the Plan Shares
- were employed by Youfoodz or a 'subsidiary' (as defined in the Corporations Act 2001) of Youfoodz (collectively referred to as the Youfoodz Group) at all times from the date you acquired the Plan Shares until 27 October 2021, and
- are not subject to the taxation of financial arrangements rules in Division 230 in relation to gains and losses on your shares.
- Note: Division 230 will generally not apply to individuals, unless they make an election for it to apply to them.
- Scheme Implementation Deed dated 13 July 2021
- Equity Incentive Plan Rules (Plan Rules)
- Scheme Booklet dated 2 September 2021, and
- Youfoodz Initial Public Offering Prospectus dated 30 October 2020.
Youfoodz Holdings Limited
9. Youfoodz is a resident of Australia as defined in subsection 6(1) of the Income Tax Assessment Act 1936 and was a public company listed on the Australian Securities Exchange until it was delisted as a result of the Scheme of Arrangement.
11. HelloFresh SE is a public company based in Berlin, Germany and provides food services such as meal-kits. It operates in the United States of America, Australia, Canada, Denmark, New Zealand, Sweden and Western Europe.
Employee Gift Offer and Exempt Share Awards
Employee Gift Offer
12. As part of the Employee Gift Offer under the Initial Public Offering, Youfoodz made offers to Youfoodz Group employees to acquire shares for a value of up to $1,000 which was intended to be treated as Exempt Share Awards under the Plan Rules.
Exempt Share Awards
16. The Plan Shares were offered under a non-discriminatory basis to at least 75% of the Australian-resident permanent employees of the Youfoodz Group who had completed more than three years of service, for no consideration.
- subject to a restriction period where they could not be disposed of until the earliest of
- three years from the date the Plan Shares were granted, or
- at the time which the employee ceased being employed by the Youfoodz Group, and
- not subject to any vesting conditions; that is, the Plan Shares could not be forfeited.
Scheme of Arrangement
18. On 13 July 2021, Youfoodz entered into a binding Scheme Implementation Deed with HelloFresh SE or one of its wholly owned subsidiaries (collectively referred to as HelloFresh) under which HelloFresh would acquire all of the issued shares in Youfoodz by way of a court ordered Scheme of Arrangement pursuant to Part 5.1 of the Corporations Act 2001.
Commissioner of Taxation
24 November 2021
|This Explanation is provided as information to help you understand how the Commissioner's view has been reached. It does not form part of the binding public ruling.|
When the minimum holding period ends
23. One of the conditions which entitled you to reduce the amount included in your assessable income when you acquired the Plan Shares is to not dispose of those shares within the minimum holding period (sections 83A-35 and 83A-45).
24. The minimum holding period set out in subsections 83A-45(4) and (5) is the earlier of three years from when the Plan Shares were acquired or when you ceased employment with the Youfoodz Group. However, the Commissioner can allow an earlier period if the Commissioner is satisfied that:
- Youfoodz intended that the requirements as set out in subsection 83A-45(4) would apply to the Plan Shares during the three years (subparagraph 83A-45(5)(a)(i)), and
- at the earlier time that the Commissioner allows, all Youfoodz shares were disposed of under a particular scheme (subparagraph 83A-45(5)(a)(ii)).
25. The Commissioner is satisfied that the Plan Rules prevented employees from disposing of the Plan Shares until the earlier of the three-year anniversary of the date the Plan Shares were acquired or the day after the date they ceased to be employed by the Youfoodz Group.
27. Accordingly, the Commissioner is satisfied that the requirements of subparagraphs 83A-45(5)(a)(i) and (ii) are met and will allow the minimum holding period to end at the earlier time of 27 October 2021.
You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
Not previously issued as a draft
ITAA 1936 6(1)
ITAA 1997 Subdiv 83A-B
ITAA 1997 Subdiv 83A-C
ITAA 1997 83A-35
ITAA 1997 83A-45
ITAA 1997 83A-45(4)
ITAA 1997 83A-45(5)
ITAA 1997 83A-45(5)(a)
ITAA 1997 83A-45(5)(a)(i)
ITAA 1997 83A-45(5)(a)(ii)
ITAA 1997 Div 230
Corporations Act 2001 Pt 5.1