Budget 2009 - Employee share schemes

Shares and options issued to employees at a discount are subject to special taxation rules. The rules distinguish between “qualifying” and “non-qualifying” shares and options. Previously qualifying shares and options received concessional tax treatment. Unless the employee elected otherwise, the taxing of the discount was deferred from the time of issue until a later time when certain conditions were met (such as restrictions on the shares or options ceased). This concession has now been removed. The discount on all employee shares and options will be taxed at the time of acquisition regardless of whether the shares or options are qualifying or not.

In some instances qualifying shares received a further concession, being a $1,000 discount.     The exemption is now only available to employees whose taxable income is less than $60,000 after adjusting for fringe benefits, salary sacrifice and negative gearing.

Both of these changes apply to employee shares or options acquired after 7.30 pm 12 May 2009.

Published : 13 May 2009