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An individual taxpayer, is to be granted options to acquire shares in a company (the company) under an employee share scheme upon their appointment as an employee, director or executive of the company. 2. The taxpayer arranges for the options to be granted to a related trust. The taxpayer may be a director of a company acting as trustee of the trust, and/or the taxpayer may be a beneficiary of the trust. 3. The options are not 'qualifying' rights under Division 13A of the Income Tax Assessment Act 1936 (ITAA 1936) as they are not granted to an employee. 4. The marketing of the arrangement may include the claim that the grant of the options is in consideration for the trust procuring the services of the individual taxpayer for the company rather than in respect of their employment or services provided. This claim is for the purpose of arguing that the trust, rather than the individual taxpayer, should be assessed on the grant of the options. 5. Under each option a share can be acquired upon payment of an exercise price. 6. The exercise price of each option is below market value of the share at the time of grant. 7. The trustee of the trust exercises the options to acquire the shares and then sells the shares. 8. In preparation of the trust return, the gain from the sale is included in the assessable income of the trust. 9. The net income of the trust may be distributed to a beneficiary, or beneficiaries, in a tax preferred position, for example, they may have accumulated tax losses.