Further consultation on employee share schemes

The Assistant Treasurer, Senator Nick Sherry, has released the timeframes for the final round of industry consultations on reforms to the taxation of employee share schemes, including releasing the Terms of Reference for the Board of Taxation review component.

As set out in the final Policy Statement of 1 July 2009, the Government will undertake a three-stage consultation process.

The three stages are:

  • a two-week consultation period on a draft Exposure Bill beginning in August;
  • a Board of Taxation consultation on technical issues to report to the Assistant Treasurer within approximately one month of the release of the draft Exposure Bill; and
  • a comprehensive Board of Taxation review on two further substantive issues to report to the Assistant Treasurer by 28 February, 2010.

Following the first two stages of this consultation process, it is envisaged legislation based on the policy statement will be introduced into Parliament in the Spring sittings.

The Board of Taxation’s review is the third stage of the consultation process. The issues before the Board are:

  • how to best determine the market value of employee share scheme benefits; and
  • whether shares and rights under an employee share scheme at a start-up, R&D or speculative focused company should have separate tax deferral arrangements.
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