Employee share scheme changes

Employee share scheme changes

The ATO has announced that, from 1 July 2015, there are new rules for the tax treatment of employee share schemes (ESSs), as well as tax concessions for start-up companies.

The ESS changes allow employees to now own up to 10% of shares in their employer company (up from 5%).

Under the new rules, if shares are acquired in a start-up company at a discount of up to 15% (relative to market value), then the discount is exempt from CGT and income tax.

Any subsequent capital gain is therefore calculated on the market value when the share was acquired.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.