Question:
Employee Share Schemes (ESS)
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
These highly valuable benefits fell into disfavour following amendments to the taxing provisions introduced by the previous Government.
New rules have been legislated with effect from 1 July 2015. Employees, who receive options and other ESS interests as remuneration from that date, will be taxed under the new rules subject to some transitional provisions.
Employees, who receive options, will generally be taxed when they exercise those options. Previously, they were taxed on the granting of the options.
If an employee chooses to let the option lapse, he or she will be able to claim a refund of any tax already paid under the old rules for those options.
Businesses will need to comply with annual reporting requirements which will require reporting when a taxing point occurs for one or more employees during the relevant financial year.
Employers must provide an ESS Statement to employees by 14 July and an ESS Annual Report to the Tax Office by 14 August. Data will be matched from these reports to the information in individual Tax Returns.
Andrew and Tony Lovett
11 August 2015
