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This is a Bill, not an Act. For current law, see the Acts databases.
2013-2014-2015
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Tax and Superannuation Laws
Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
(Treasury)
A Bill for an Act to amend the law relating to
taxation, and for related purposes
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Improvements to taxation of employee share
schemes
3
Part 1--Main amendments
3
Income Tax Assessment Act 1936
3
Income Tax Assessment Act 1997
3
Income Tax (Transitional Provisions) Act 1997
14
Taxation Administration Act 1953
14
Part 2--Amendments about market value
15
Income Tax Assessment Act 1997
15
Part 3--Technical amendments
16
Income Tax Assessment Act 1997
16
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
1
A Bill for an Act to amend the law relating to
1
taxation, and for related purposes
2
The Parliament of Australia enacts:
3
1 Short title
4
This Act may be cited as the Tax and Superannuation Laws
5
Amendment (Employee Share Schemes) Act 2015.
6
2 Commencement
7
This Act commences on the day after this Act receives the Royal
8
Assent.
9
2
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
3 Schedules
1
Legislation that is specified in a Schedule to this Act is amended or
2
repealed as set out in the applicable items in the Schedule
3
concerned, and any other item in a Schedule to this Act has effect
4
according to its terms.
5
Improvements to taxation of employee share schemes Schedule 1
Main amendments Part 1
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
3
Schedule 1
--Improvements to taxation of
1
employee share schemes
2
Part 1
--Main amendments
3
Income Tax Assessment Act 1936
4
1 Paragraph 109NB(a)
5
Repeal the paragraph, substitute:
6
(a) Subdivision 83A-B, and the provisions referred to in
7
paragraphs 83A-33(1)(a) to (c), of that Act apply; or
8
(aa) Subdivision 83A-B, and the provisions referred to in
9
paragraphs 83A-35(1)(a) and (b), of that Act apply; or
10
Income Tax Assessment Act 1997
11
2 At the end of section 83A-5
12
Add:
13
; and (c) to increase the number of new entrepreneurial companies in
14
Australia by assisting them to attract and retain employees by
15
providing those employees with a tax concession for
16
acquiring shares under such schemes.
17
3 Section 83A-15
18
Omit:
19
You may be entitled to reduce the amount included in your
20
assessable income if you meet certain conditions which seek to
21
limit the concession to genuine schemes broadly available to all
22
permanent employees who do not already have anything other than
23
a minor interest in their employer.
24
The income year in which you are taxed may be deferred if there is
25
a real risk of forfeiture, or you acquired the shares or securities
26
under particular salary sacrifice arrangements (see
27
Subdivision 83A-C).
28
Schedule 1 Improvements to taxation of employee share schemes
Part 1 Main amendments
4
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
substitute:
1
You may be entitled to reduce the amount included in your
2
assessable income if you meet one of 2 sets of conditions.
3
4 Section 83A-30
4
Before "For", insert "(1)".
5
5 At the end of section 83A-30 (after the note)
6
Add:
7
(2) Subsection (1) does not apply to an
*
ESS interest that is a
8
beneficial interest in a right (or to the right of which it forms part),
9
if section 83A-33 (about start ups) reduces the amount to be
10
included in your assessable income in relation to the interest.
11
6 After section 83A-30
12
Insert:
13
83A-33 Reducing amounts included in assessable income--start ups
14
(1) Reduce the total amount included in your assessable income under
15
subsection 83A-25(1) for an income year by the total of the
16
amounts included in your assessable income under that subsection,
17
for the income year, for
*
ESS interests to which all of the following
18
provisions apply:
19
(a) subsections (2) to (6) of this section;
20
(b) section 83A-45 (about further conditions);
21
(c) for ESS interests that are beneficial interests in
*
shares--
22
subsection 83A-105(2) (about broad availability of schemes).
23
No equity interests listed on a stock exchange
24
(2) This subsection applies to an
*
ESS interest in a company (the first
25
company) if no
*
equity interests in any of the following companies
26
are listed for quotation in the official list of any
*
approved stock
27
exchange at the end of the first company's most recent income year
28
before you acquired the interest:
29
(a) the first company;
30
Improvements to taxation of employee share schemes Schedule 1
Main amendments Part 1
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
5
(b) any
*
subsidiary of the first company at the end of that income
1
year;
2
(c) any holding company (within the meaning of the
3
Corporations Act 2001) of the first company at the end of
4
that income year;
5
(d) any subsidiary of a holding company (within the meaning of
6
that Act) of the first company at the end of that income year.
7
Note:
For identifying any holding company, see also subsection (7).
8
Incorporated for less than 10 years
9
(3) This subsection applies to an
*
ESS interest in a company if:
10
(a) the company (the first company); and
11
(b) each of the other companies referred to in subsection (2);
12
was incorporated by or under an
*
Australian law or
*
foreign law
13
less than 10 years before the end of the first company's most recent
14
income year before you acquired the interest.
15
Company has aggregated turnover not exceeding $50 million
16
(4) This subsection applies to an
*
ESS interest in a company if the
17
company has an
*
aggregated turnover not exceeding $50 million
18
for the company's most recent income year before the income year
19
in which you acquire the ESS interest.
20
Note:
For working out aggregated turnover, see also subsection (7).
21
Conditions relating to market value
22
(5) This subsection applies to an
*
ESS interest in a company if:
23
(a) in the case of an ESS interest that is a beneficial interest in a
24
*
share--the discount on the ESS interest is no more than 15%
25
of its
*
market value when you acquire it; or
26
(b) in the case of an ESS interest that is a beneficial interest in a
27
right--the amount that must be paid to exercise the right is
28
greater than or equal to the market value of an ordinary share
29
in the company when you acquire the ESS interest.
30
Schedule 1 Improvements to taxation of employee share schemes
Part 1 Main amendments
6
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
Employer to be an Australian resident company
1
(6) This subsection applies to an
*
ESS interest you acquire under an
2
*
employee share scheme if, when you acquire the interest, your
3
employer is an Australian resident.
4
Disregard certain investments
5
(7) For the purposes of subsections (2) and (4), disregard:
6
(a)
*
eligible venture capital investments by a
*
VCLP,
*
ESVCLP
7
or
*
AFOF; and
8
(b) investments by an
*
exempt entity that is a
*
deductible gift
9
recipient;
10
when identifying any holding company (within the meaning of the
11
Corporations Act 2001) or working out
*
aggregated turnover.
12
7 Section 83A-35 (heading)
13
Repeal the heading, substitute:
14
83A-35 Reducing amounts included in assessable income--other
15
cases
16
8 Subsection 83A-35(1)
17
Omit all the words after "
*
ESS interests", substitute:
18
to which all of the following provisions apply:
19
(a) subsections (6) and (7) of this section;
20
(b) section 83A-45 (about further conditions).
21
9 At the end of subsection 83A-35(2)
22
Add:
23
; and (c) subsection (1) does not apply if section 83A-33 (about start
24
ups) reduces the amount to be included in your assessable
25
income for the income year for the
*
ESS interests.
26
10 Subsections 83A-35(3), (4), (5), (8) and (9)
27
Repeal the subsections.
28
Improvements to taxation of employee share schemes Schedule 1
Main amendments Part 1
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
7
11 At the end of Subdivision 83A-B
1
Add:
2
83A-45 Further conditions for reducing amounts included in
3
assessable income
4
Employment
5
(1) This subsection applies to an
*
ESS interest in a company if, when
6
you acquire the interest, you are employed by:
7
(a) the company; or
8
(b) a
*
subsidiary of the company.
9
Employee share scheme relates only to ordinary shares
10
(2) This subsection applies to an
*
ESS interest you acquire under an
11
*
employee share scheme if, when you acquire the interest, all the
12
ESS interests available for acquisition under the scheme relate to
13
ordinary
*
shares.
14
Integrity rule about share trading and investment companies.
15
(3) This subsection applies to an
*
ESS interest in a company unless,
16
when you acquire the interest:
17
(a) the predominant business of the company (whether or not
18
stated in its constituent documents) is the acquisition, sale or
19
holding of
*
shares, securities or other investments (whether
20
directly or indirectly through one or more companies,
21
partnerships or trusts); and
22
(b) you are employed by the company; and
23
(c) you are also employed by any other company that is:
24
(i) a
*
subsidiary of the first company; or
25
(ii) a holding company (within the meaning of the
26
Corporations Act 2001) of the first company; or
27
(iii) a subsidiary of a holding company (within the meaning
28
of the Corporations Act 2001) of the first company.
29
Schedule 1 Improvements to taxation of employee share schemes
Part 1 Main amendments
8
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
Minimum holding period
1
(4) This subsection applies to an
*
ESS interest you acquire under an
2
*
employee share scheme if, at all times during the interest's
3
*
minimum holding period, the scheme is operated so that every
4
acquirer of an ESS interest (the scheme interest) under the scheme
5
is not permitted to dispose of:
6
(a) the scheme interest; or
7
(b) a beneficial interest in a
*
share acquired as a result of the
8
scheme interest;
9
during the scheme interest's minimum holding period.
10
Note:
This subsection is taken to apply in the case of a takeover or
11
restructure: see subsection 83A-130(3).
12
(5) An
*
ESS interest's minimum holding period is the period starting
13
when the interest is acquired under the
*
employee share scheme
14
and ending at the earlier of:
15
(a) 3 years later, or such earlier time as the Commissioner allows
16
if the Commissioner is satisfied that:
17
(i) the operators of the scheme intended for subsection (4)
18
to apply to the interest during the 3 years after that
19
acquisition of the interest; and
20
(ii) at the earlier time that the Commissioner allows, all
21
*
membership interests in the relevant company were
22
disposed of under a particular
*
scheme; and
23
(b) when the acquirer of the interest ceases being employed by
24
the relevant employer.
25
10% limit on shareholding and voting power
26
(6) This subsection applies to an
*
ESS interest in a company if,
27
immediately after you acquire the interest:
28
(a) you do not hold a beneficial interest in more than 10% of the
29
*
shares in the company; and
30
(b) you are not in a position to cast, or to control the casting of,
31
more than 10% of the maximum number of votes that might
32
be cast at a general meeting of the company.
33
(7) For the purposes of subsection (6), you are taken to:
34
Improvements to taxation of employee share schemes Schedule 1
Main amendments Part 1
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
9
(a) hold a beneficial interest in any
*
shares in the company that
1
you can acquire under an
*
ESS interest that is a beneficial
2
interest in a right to acquire a beneficial interest in such
3
shares; and
4
(b) be in a position to cast votes as a result of holding that
5
interest in those shares.
6
12 Section 83A-100
7
Omit "7 years", substitute "15 years".
8
13 Section 83A-100
9
Omit:
10
A share or stapled security you acquire under salary sacrifice
11
arrangements can also be subject to this deferred taxing point if
12
you get no more than $5,000 worth of shares under those
13
arrangements.
14
substitute:
15
This deferred taxing point can also apply to:
16
(a)
a share or stapled security you acquire under salary
17
sacrifice arrangements, if you get no more than $5,000
18
worth of shares under those arrangements; or
19
(b)
a right, if the scheme restricted you immediately
20
disposing of the right, and stated that this Subdivision
21
applies.
22
14 Before paragraph 83A-105(1)(b)
23
Insert:
24
(ab) section 83A-33 (about start ups) does not reduce the amount
25
to be included in your assessable income in relation to the
26
interest; and
27
15 Paragraph 83A-105(1)(b)
28
Omit "83A-35(3), (4), (5) and (9)", substitute "83A-45(1), (2), (3) and
29
(6)".
30
Schedule 1 Improvements to taxation of employee share schemes
Part 1 Main amendments
10
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
16 Paragraph 83A-105(1)(d)
1
After "subsection (3)", insert "or (6)".
2
17 Subsection 83A-105(1) (note)
3
Omit "83A-35(3), (4), (5), and (9)", substitute "83A-45(1), (2), (3) and
4
(6)".
5
18 At the end of section 83A-105
6
Add:
7
Scheme's rules state that this Subdivision applies
8
(6) This subsection applies to an
*
ESS interest you acquire under an
9
*
employee share scheme during an income year at a discount if:
10
(a) the interest is a beneficial interest in a right; and
11
(b) at the time you acquired the interest:
12
(i) the scheme genuinely restricted you immediately
13
disposing of the right; and
14
(ii) the governing rules of the scheme expressly stated that
15
this Subdivision applies to the scheme (subject to the
16
requirements of this Act).
17
19 Subsections 83A-115(6) and 83A-120(6)
18
Omit "7 year", substitute "15 year".
19
20 Subsection 83A-120(7) (heading)
20
Repeal the heading, substitute:
21
No restrictions on disposing of a share after exercising the right
22
21 Paragraphs 83A-120(7)(a) and (b)
23
Repeal the paragraphs, substitute:
24
(a) you exercise the right; and
25
22 Paragraph 83A-120(7)(c)
26
Omit "if you exercise the right", substitute "after exercising the right".
27
Improvements to taxation of employee share schemes Schedule 1
Main amendments Part 1
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
11
23 Subsection 83A-130(3)
1
Omit "83A-35(8) (about the 3 year rule)", substitute "83A-45(4) (about
2
the minimum holding period)".
3
24 Subparagraphs 83A-130(9)(b)(i) and (ii)
4
Omit "5%", substitute "10%".
5
25 At the end of section 83A-130
6
Add:
7
(10) For the purposes of paragraph (9)(b), you are taken to:
8
(a) hold a beneficial interest in any
*
shares in the new company
9
that you can acquire under an
*
ESS interest that is a
10
beneficial interest in a right to acquire a beneficial interest in
11
such shares; and
12
(b) be in a position to cast votes as a result of holding that
13
interest in those shares.
14
26 Section 83A-305
15
Before "If an", insert "(1)".
16
27 At the end of section 83A-305
17
Add:
18
(2) For the purposes of subsections 83A-45(6) and (7), subsection (1)
19
of this section also applies if the
*
associate acquired the
*
ESS
20
interest otherwise than in relation to the individual's employment.
21
28 Section 83A-310
22
Before "This", insert "(1)".
23
29 Subparagraph 83A-310(c)(i)
24
Omit "by that individual to cease particular employment", substitute "to
25
which subsection (2) applies".
26
30 At the end of section 83A-310
27
Add:
28
(2) This subsection applies to the following choices by the individual:
29
Schedule 1 Improvements to taxation of employee share schemes
Part 1 Main amendments
12
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
(a) a choice to cease particular employment;
1
(b) in the case of an
*
ESS interest that is a beneficial interest in a
2
right:
3
(i) a choice not to exercise the right before it lapsed; or
4
(ii) a choice to allow the right to be cancelled.
5
31 Subsection 115-30(1) (after table item 9)
6
Insert:
7
8
9A
A
*
share the acquirer
*
acquires by
exercising an
*
ESS interest if:
(a) section 83A-33 (about start ups)
reduces the amount to be
included in the acquirer's
assessable income in relation to
the ESS interest; and
(b) exercising the ESS interest
causes Subdivision 130-B or
Division 134 to apply
When the acquirer
*
acquired the
*
ESS interest
32 Paragraph 125-75(2)(b)
9
Repeal the paragraph, substitute:
10
(b) these provisions apply to the beneficial interest:
11
(i) Subdivision 83A-B and the provisions referred to in
12
paragraphs 83A-33(1)(a) to (c); or
13
(ii) Subdivision 83A-B and the provisions referred to in
14
paragraphs 83A-35(1)(a) and (b); or
15
(iii) Subdivision 83A-C; and
16
33 Subparagraph 125-75(3)(a)(ii)
17
Repeal the subparagraph, substitute:
18
(ii) the provisions referred to in subparagraph (2)(b)(i), (ii)
19
or (iii) apply to the beneficial interest; and
20
34 At the end of subsection 130-80(4)
21
Add:
22
; or (c) you acquiring an ESS interest that:
23
(i) is a beneficial interest in a right; and
24
Improvements to taxation of employee share schemes Schedule 1
Main amendments Part 1
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
13
(ii) is an ESS interest to which the provisions referred to in
1
paragraphs 83A-33(1)(a) to (c) (about start ups) apply.
2
35 Subparagraphs 208-215(1)(b)(i) and (ii)
3
Omit "5%", substitute "10%".
4
36 At the end of section 208-215
5
Add:
6
(3) For the purposes of paragraph (1)(b), you are taken to:
7
(a) hold a beneficial interest in any
*
shares in the company that
8
you can acquire under an
*
ESS interest that is a beneficial
9
interest in a right to acquire a beneficial interest in such
10
shares; and
11
(b) be in a position to cast votes as a result of holding that
12
interest in those shares.
13
37 Section 768-915
14
Before "A", insert "(1)".
15
38 At the end of section 768-915
16
Add:
17
(2) Subsection (1) does not apply in relation to
*
CGT event I1 if:
18
(a) the CGT event happens in relation to an
*
ESS interest that is
19
a beneficial interest in a right (or to a
*
share acquired by
20
exercising such a right); and
21
(b) the provisions referred to in paragraphs 83A-33(1)(a) to (c)
22
(about start ups) apply to the ESS interest.
23
39 Subsection 768-955(4)
24
Repeal the subsection, substitute:
25
(4) This section does not apply to an
*
ESS interest if:
26
(a) Subdivision 83A-C (about employee share schemes) applies
27
to the interest, and the
*
ESS deferred taxing point for the
28
interest has not yet occurred; or
29
(b) the provisions referred to in paragraphs 83A-33(1)(a) to (c)
30
(about start ups) apply to the ESS interest.
31
Schedule 1 Improvements to taxation of employee share schemes
Part 1 Main amendments
14
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
40 Subsection 855-45(4)
1
Repeal the subsection, substitute:
2
(4) This section does not apply to an
*
ESS interest if:
3
(a) Subdivision 83A-C (about employee share schemes) applies
4
to the interest, and the
*
ESS deferred taxing point for the
5
interest has not yet occurred; or
6
(b) the provisions referred to in paragraphs 83A-33(1)(a) to (c)
7
(about start ups) apply to the ESS interest.
8
41 Subsection 995-1(1)
9
Insert:
10
minimum holding period, for an
*
ESS interest, has the meaning
11
given by subsection 83A-45(5).
12
Income Tax (Transitional Provisions) Act 1997
13
42 Paragraph 83A-5(4)(d)
14
Omit "83A-310(a), (b) and (c)", substitute "83A-310(1)(a), (b) and (c)".
15
Taxation Administration Act 1953
16
43 Subsection 14-155(2) in Schedule 1
17
Omit "section 83A-35", substitute "sections 83A-33 and 83A-35".
18
44 Application of amendments
19
The amendments made by this Part apply in relation to ESS interests
20
acquired on or after 1 July 2015.
21
Improvements to taxation of employee share schemes Schedule 1
Amendments about market value Part 2
No. , 2015
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
15
Part 2
--Amendments about market value
1
Income Tax Assessment Act 1997
2
45 At the end of section 960-400
3
Add:
4
The Commissioner may approve methods to use for working out
5
the market value of assets or non-cash benefits.
6
46 After section 960-410
7
Insert:
8
960-412 Working out market value using an approved method
9
(1) The
*
market value of an asset or
*
non-cash benefit that you work
10
out using a method approved under subsection (2) for that kind of
11
asset or benefit binds the Commissioner in relation to you.
12
Note:
You do not have to use the method.
13
(2) The Commissioner may, by legislative instrument, approve
14
methods for working out the
*
market value of assets or
*
non-cash
15
benefits. A method may include conditions.
16
Note 1:
Different methods may be approved for different kinds of assets or
17
non-cash benefits (see subsection 13(3) of the Legislative Instruments
18
Act 2003).
19
Note 2:
Any approved method would need to be consistent with the other rules
20
about market value in this Subdivision.
21
Schedule 1 Improvements to taxation of employee share schemes
Part 3 Technical amendments
16
Tax and Superannuation Laws Amendment (Employee Share Schemes)
Bill 2015
No. , 2015
Part 3
--Technical amendments
1
Income Tax Assessment Act 1997
2
47 Subsection 83A-20(1) (note 3)
3
Repeal the note.
4
48 At the end of subsection 83A-25(1)
5
Add:
6
Note:
Regulations made for section 83A-315 may be relevant to working out
7
whether you acquire the ESS interest at a discount.
8
49 After paragraph 83A-105(1)(a)
9
Insert:
10
(aa) after applying section 83A-315, there is still a discount given
11
in relation to the interest; and
12
50 Subsection 83A-315(1)
13
After "Whenever this Division", insert "(other than section 83A-20)".
14
51 Application of amendments
15
The amendments made by this Part apply to assessments for the
16
2011-12 income year and later income years.
17