Employee share schemes

Non-binding edited private advice. This is an edited version of private advice the ATO gave to a specific taxpayer about their own circumstances. You cannot rely on it — it is not binding and provides no protection for anyone else (see PS LA 2008/4). Use it as a guide to the ATO’s thinking, not as authority.

Did the deferred taxing point for a portion of your employee share scheme shares (the ESS shares) occur on XX date under section 83A-120 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Yes. The deferred taxing point of a portion of the ESS shares that were not automatically disposed of XX date. Until that date, you were not able to dispose of them due to trading restrictions placed on them due to your possession of inside information. This ruling applies for the following period : 1 July 20XX to 30 June 20XX The scheme commenced on: XX XX 20XX

You were a senior employee of entity A in country A. As part of your employment, you were eligible for shares through an employee share scheme. Multiple vesting events happened over the 20XX financial year. When you vested an automatic sale, it triggered to sell a portion of the ESS shares to cover tax in country A. You and entity A have no control over that, it is legislated in country A and no option exists to opt out. Several blocks of trading dates were available during the 20XX financial year to trade the ESS shares. For the trading dates, you were involved in potential take overs by entity A of another company. In addition to that, you were involved with other major acquisitions over that period, all with sensitive insider information. You were not allowed to trade in any of the above dates due to being in possession of sensitive insider information. The trading restrictions placed on you due to your possession of sensitive insider information ceased on XX date.

Income Tax Assessment Act 1997 section 83A-120