Source: The Tax Specialist Journal Article
Published Date: 1 Feb 2020
This article considers the employee share scheme (ESS) tax issues that arise in the context of corporate transactions. The focus of the article is on demerger transactions, but the core principles are generally applicable to other corporate transactions, including takeovers, divestments and initial public offerings. While it should be possible to achieve sensible tax outcomes for employees, there are a number of traps and counterintuitive rules that companies need to be aware of when planning for the transaction. The first part of the article explains the core ESS rules that are likely to come into play on a demerger transaction. The second part of the article considers the consequences of a demerger on ESS interests in the form of rights to acquire shares. The third part of the article briefly considers the consequences of a demerger on ESS interests in the form of beneficial interests in shares. The fourth part of the article considers the interplay between ESS interests and shareholders' entitlement to CGT roll-over relief and the demerger dividend exemption.
More by Shaun Cartoon
Employee share schemes - Paper 04 May 2023
Employee share schemes - Presentation 04 May 2023
Employee share schemes - Audio 04 May 2023
Employee share schemes - Video 04 May 2023
David v Goliath: Dealing with ATO Debt and Recovery Action - Presentation 17 Feb 2023
David v Goliath: Dealing with ATO Debt and Recovery Action - Audio 16 Feb 2023
Taxation of Australian inbound investments - Paper 19 Sep 2019
Taxation of Australian inbound investments - Presentation 19 Sep 2019
Employee Share Schemes for SMEs - Presentation 23 Aug 2018
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Already a Subscriber? Login now
Details
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags