Private ruling: Employee share scheme
Date of advice: 24 April 2026
Published: 10 August 2026
Ruling period: 30 June 20YY
Date scheme commenced: 01 July 20YY

Ruling: Q1: Is the deferred taxing point under Division 83A of the Income Tax Assessment Act (ITAA 1997) triggered as a result of the restructure of your former employer and insertion of a new holding company? | A1: Yes | Q2: Is the market value of the vested restricted stock units (RSUs) included as assessable income in the 20YY income year? | A2: Yes | Q3: Can the Class Ruling be applied to you to allow a scrip for scrip treatment under section 83A-130 of the ITAA 1997? | A3: No

Relevant facts and circumstances: You were employed by Company A until DD MM 20YY when you resigned. You were granted X Restricted Stock Units (RSUs) in Company A under the company's Employee Share Scheme (ESS). When you ceased employment with Company A, X RSUs had vested (spread amongst the X grants) and you were allowed to retain the RSUs under the terms of the ESS, the remaining unvested RSUs were forfeited. On DD MM 20YY, you were allowed to sell X of the vested RSUs to Company A at a fixed price. (Triggering a deferred taxing point with the amount included in your 20YY Income Tax Return). After selling the X RSUs, you retained X vested RSUs. On DD MM 20YY you left Australia and moved overseas to commence new employment. You have advised that you were a non-resident from DD MM 20YY and remain a non-resident. On DD MM 20YY, Company A was restructured, with a new holding company being inserted. The existing RSUs in Company A were removed and replaced by new RSUs in the New Company A (new holding company). Company A applied for a Class Ruling (CR). As a result of the restructure, and after the CR, Company A issued an ESS statement to you with the market value of the remaining X RSUs, on the basis that the ESS deferred taxing point was met. ESS statement provided to you from Company A, for the year ending 30 June 20YY, states the discount from the deferral schemes is $X. Company A, Amended and Restated 20YY Equity Incentive Plan, as amended on DD MM 20YY. (4) Stock available for awards 4.1 Number of shares. Subject to adjustment under Section 7 hereof, Awards may be made under the Plan covering up to X shares of common stock. If any Award expires or lapses or is terminated, surrendered or cancelled without having been fully settled or is forfeited in whole or in part, in any case in a manner that results in any shares of common stock covered by such Award not being issued or being so reacquired by the Company, the unused common stock covered by such Award shall again be available for the grant of Awards under the Plan. 4.2 Substitute Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Administrator may grant Awards in substitution for any stock or stock-based awards granted prior to such merger or consolidation by such entity or an affiliate thereof [emphasised]. (5) Restricted Stock, Restricted Stock Units 5.1 General. The Administrator may grant restricted stock, or the right to purchase restricted stock, to the service provider, subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant. The Administrator may grant to service providers restricted stock units, which may be subject to vesting and forfeiture conditions during applicable restriction period or periods, as set forth in an applicable Award Agreement. 5.2 Terms and Conditions for all Restricted Stock and Restricted Stock Unit Awards. The Administrator shall determine and set forth in the applicable Award Agreement the terms and conditions applicable to each Restricted Stock and Restricted Stock Unit Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, in each case, if any. 5.3 Additional Provisions Relating to Restricted Stock Units Settlement. Upon the vesting of a RSU, the Participant shall be entitled to receive from the Company one share of common stock or an amount of cash or other property equal to the fair market value of one share of common stock on the settlement date. The Administrator may provide that settlement of RSUs shall occur upon or as soon as reasonably practicable after the vesting of the RSUs or shall instead be deferred, on a mandatory basis or at the election of the Participant, in a manner that complies with Section 409A. (7) Adjustments for Changes in Common Stock and Certain Other Events. 7.1 In the event that the Administrator determines that any dividend or other distribution, reorganisation, merger, consolidation, combination, repurchase, recapitalisation, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company affects the common stock such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award, then the Administrator may, in such manner as it may deem equitable, adjust any or all of: (a) The number and kind of shares of common stock with respect to which Awards may be granted or awarded, (b) The number and kind of shares of common stock subject to outstanding Awards; (c) The grant price with respect to any Award; and (d) The terms and conditions of any Awards (including, without limitation any applicable financial or other performance "targets" specified in an Award Agreement). 7.2 In the event of any transaction or event hereof (including without limitation any business sale), or any unusual or nonrecurring transaction or event affecting the Company the Administrator, on such terms and conditions as it deems appropriate, or upon the Participant's request, is hereby authorised to take any one or more of the following actions in order to (x) prevent dilution of enlargement of the benefits or potential benefits intended by the Company (y) to facilitate such transaction or event (a) To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the settlement of the vested portion of such Award or realisation of the Participant's rights under the vested portion of such Award (b) To provide that such Award shall vest and, to the extent applicable, be settleable as to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award; (c) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and applicable purchase price, in all cases, as determined by the Administrator; (d) To make adjustments in the number and type of shares of common stock subject to outstanding Awards, and the criteria included in, outstanding Awards which may be granted in the future; (e) To replace such Award with other rights or property selected by the Administrator; and/or (f) To provide that the Award will terminate and cannot vest, be settled or become payable after the applicable event. (8) General Provisions Applicable to Awards 8.6 Amendment of award. The Administrator may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type and changing the date of settlement. The Participant's consent to such action shall be required unless (i) the Administrator determines that the action, taking into account any related action, would not materially and adversely affect the Participant, or (ii) the change is permitted under Section 7 and 9.6 hereof. 8.8 Acceleration. The Administrator may at any time provide that any Awad shall become immediately vested and/or exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realisable in full or in part, as the case may be. (9) Miscellaneous 9.4 Joinders. Receipt of any Award shall constitute agreement by the Participant receiving such award to be bound by all of the terms and conditions of the stockholders agreement. 9.5 Amendment of Plan. The Administrator may amend, suspend or terminate the Plan or any portion thereof at any time; provided that no amendment of the Plan shall materially and adversely affect any Award outstanding at the time of such amendment without the consent of the affected Participant. (10) Definitions 10.6 Business Sale Notwithstanding the foregoing, if a Business Sale would give rise to a payment or settlement event with respect to any Award that constitutes "nonqualified deferred compensation," the transaction or event constituting the business sale must also constitute a "change in control event" in order to give rise to the payment or settlement event for such award, to the extent required by Section 409A. Company A, 20YY XXX Equity Incentive Plan, Restricted Stock Unit Agreement: Company A. a Delaware corporation (the Company) pursuant to its 20YY XXX Equity Incentive Plan (the Plan), hereby grants to you an award of Restricted Stock Units (RSUs). Each vested RSU represents the right to receive, in accordance with the Grant Notice and the RSU Agreement (the Agreement), one share of the common stock of the Company. In accordance with the Plan, the Administrator may, at its discretion, settle each RSU that vests in cash or other property equal to the fair market value of one share of common stock on the settlement date. This award of RSUs is subject to all of the terms and conditions set forth herein and in the Agreement and the Plan, each of which is incorporated herein by reference. By your online acceptance of the RSU, you and the Company agree to be bound by the terms and conditions of the Plan, Grant Notice and this Agreement. Participant has reviewed the Grant Notice, this Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement, the Grant Notice and the Plan. Participant hereby agrees to accept as binding conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan and this Agreement, Participant acknowledges and agrees that he or she shall automatically become a party to the Stockholders Agreement in accordance with Section 10.4 of the Plan. Exhibit A - To Restricted Stock Unit Grant Notice, Restricted Stock Unit Agreement 1. Grant. Pursuant to the RSU Grant Notice Company A, has granted to the individual set forth in the Grant Notice that number of RSUs. in the Grant Notice under the Company's 20YY XXX Equity Incentive Plan, as may be amended from time to time. 2. RSUs. On each vesting date, the Company shall deliver one share of common stock with respect to each RSU that vests on such vesting date. Unless and until an RSU vests, the Participant will have no right to settlement in respect of any such RSU. Prior to actual settlement in respect of any vested RSU, such RSU will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. 3. Vesting and Forfeiture (a) Subject to sections 3(b) and 3(c) below, the RSUs shall vest in accordance with the vesting schedule set forth in the Grant Notice. (b) Notwithstanding the foregoing, in the event the Participant experiences a termination of service for any reason, all RSUs that have not satisfied the service-based requirement on or prior to the date of such termination shall be immediately forfeited by the Participant as of the date of such termination without any payment of consideration therefor. (c) Further notwithstanding the foregoing, in the event that the liquidity event requirement is not satisfied prior to the expiration date set forth in the Grant Notice, then the RSUs shall be forfeited by the Participant as of the expiration date without any payment of consideration therefor (even if some or all of the service-based requirement has been satisfied). (6) Non-Transferability. Except as may be expressly determined by the Administrator, and subject to the Stockholders Agreement, neither the RSUs nor any interest or right therein may be transferred in any manner except by Will or by the laws of descent or distribution. The terms of this Agreement shall be binding upon the executors, Administrators, heirs, successors and assigns of the Participant. (8) Lock-Up Period. Participant shall not offer, pledge, sell, contract to sell, any common stock of the Company for the period specified by the representative of the underwriters of common stock of the Company not to exceed 180 days following the effective date of any registration statement of the Company filed under the Securities Act. (9) Restrictions on Shares. Shares of common stock issued pursuant to the RSUs shall be subject to such terms and conditions as the Administrator shall determine including, without limitation, transferability restrictions, repurchase rights, requirements that such shares of common stock be transferred in the event of certain transactions, rights of first refusal with respect to permitted transfer of shares (18) Adjustments. The Participant acknowledges that the RSUs are subject to modifications and termination in certain events as provided in the Agreement and Section 13 of the Plan.

Relevant legislative provisions: Income Tax Assessment Act 1997 - subsection 83A-10(2) | Income Tax Assessment Act 1997 - Division 83A | Income Tax Assessment Act 1997 - subsection 83A-115(2) | Income Tax Assessment Act 1997 - subdivision 83A-115(4) | Income Tax Assessment Act 1997 - section 83A-310 | Income Tax Assessment Act 1997 - subsections 83A-130(4) | Income Tax Assessment Act 1997 - subsections 83A-130(5) | Income Tax Assessment Act 1997 - subsections 83A-130(6)

Reasons for decision: Summary: Is the deferred taxing point under Division 83A of the Income Tax Assessment Act (ITAA 1997) triggered as a result of the restructure of your former employer and insertion of a new holding company? An employee share scheme (ESS) is defined in subsection 83A-10(2) of the ITAA 1997 as a scheme under which ESS interests in a company are provided to employees, or associates of employees, of the company, or a subsidiary of the company, in relation to the employee's employment. In summary, the ESS provisions recognise the dual nature of grants of shares or options to acquire shares (collectively known as ESS interests) as both a component of an employee's remuneration package and also as an ongoing investment. To this end, the ESS provisions provide a mechanism for recognising an appropriate value for remuneration purposes and an adjustment to the purchase price for investment purposes to reflect the amount treated as remuneration. The ESS provisions achieve this outcome by: • Determining when a taxpayer needs to include any discount received in relation to a share or right to acquire the share in their assessable income • Calculating the amount of this discount using the market value of the share or right to acquire the share at this date ignoring any selling restrictions or forfeiture conditions, and • Using this date and the market value of the share or right as the acquisition date and amount paid for it for all other income tax purposes. The term 'discount' is not defined for the purposes of Division 83A. However, the Explanatory Memorandum to the Tax Laws Amendment (2009 Budget Measures No. 2) Act 2009 states at paragraph 1.102 that the term 'discount' is: the market value of the ESS interest less any consideration paid, or to be paid, by the employee. When the taxpayer does not pay any consideration to acquire the ESS interests, the discount will be equal to their market value. Restricted stock units (RSUs) are usually taxed at the ESS deferred taxing point, which is when the restriction lifts and you become the beneficial owner of the shares. Under a tax-deferred scheme, the discount you receive on the ESS interest is included in your assessable income when the ESS deferred taxing point occurs. That is if the fair market value of the shares is treated as ordinary income. In Gennai 2000 ATC [2020] AATA 4667 the risk that an employee could lose their job amounted to a "real risk" that they would forfeit or lose an ESS interest (share options) under the relevant scheme conditions, resulting in a deferred taxing point. According to the AAT, paragraph 83A-105(3)(b) neither directed itself to the mind of a reasonable person nor to the subjective assessment of the relevant taxpayer; the question is whether the scheme conditions pose a real risk of loss or forfeiture. What constitutes a genuine restriction preventing disposal? The concept of an employee being "genuinely restricted" from "immediately disposing" of their ESS interest is central to the determination of the ESS deferred taxing point. The ATO's view is that these terms are not defined and so take on their ordinary meaning. A disposal can therefore include a sale, transfer, assignment or other form of alienation of the ESS interest. The restriction must also be "immediate", i.e. it prevents the employee from presently disposing their ESS interest, rather than at a future point in time. For an ESS share, subsection 83A-115(2) provides that the deferred taxing point is the earliest of: (a) when there is no real risk of forfeiture or loss of the share or scheme restrictions on disposal of the share are lifted; and (b) 15 years after the share was acquired (7 years in the case of shares acquired before DD MM 20YY). No forfeiture/no disposal restrictions Subsection 83A-115(4) provides that a deferred taxing point for a share will occur at the earliest time when: (a) there is no real risk that, under the conditions of the ESS, the share will be forfeited (other than by disposal); and (b) if, at the acquisition time, the ESS imposed genuine restrictions on the immediate disposal of the share - those restrictions end. The relevant Explanatory Memorandum at paragraph 1.194 states that a restriction that otherwise meets the conditions for a genuine restriction, but can be lifted in cases of severe financial hardship, will still be treated as a genuine restriction. Restrictions will be lifted once the employee is able to realise the share [emphasis added]. Some shares may be restricted by trading windows in which they can be sold. In this case, a deferred taxing point will arise as soon as the employee is able to dispose of the share at the start of the trading window. Taxation Determination TD 2022/4 Income tax: when are you genuinely restricted from immediately disposing of an interest provided under an employee share scheme? provides the following guidance: • to be genuine, a scheme's disposal restrictions must be sufficiently identifiable, certain and legally enforceable. There must also be "serious and enforced consequences" when a breach of a disposal restriction occurs; • a requirement to make an application to the employer, or a company discretion, to allow trade does not necessarily constitute genuine disposal restrictions. A broad discretion conferred on a company board will often allow "unfettered lifting of restrictions", based on various subjective considerations. If the board routinely approves requests to trade, this discretionary power is not a genuine disposal restriction; • a disposal restriction will be considered genuine if it can be lifted in exceptional and extraordinary circumstances, e.g. severe financial hardship; • in relation to the term "immediately", a scheme's genuine disposal restrictions must prevent holders from presently disposing of their ESS interests, rather than imposing a restriction at a future time. If a holder is (or was) able to participate in a share buy-back, or to gift or transfer the ESS interest to a spouse or family trust, the holder is not genuinely restricted from immediately disposing of the interest; • ASX Listing Rules and the Corporations Act 2001 may include restrictions that prevent holders from disposing of their ESS interest in certain circumstances; • a scheme may prevent the holder from disposing of their ESS interest if in possession of price-sensitive information. Such a restriction will usually exist together with a company's other documented rules which prevent or restrict employees from disposing of their interests in the company. Position in a company is not evidence that a holder possessed price-sensitive information at a particular time - the holder must show actual possession of such information. • a scheme's genuine disposal restrictions will be lifted at the first time a holder can take some action to deal with or realise the ESS interest (e.g. via sale, transfer or gift). It is irrelevant whether action is actually taken, or whether the lifting of trading restrictions is temporary (e.g. during a short term trading window). The scheme will no longer restrict the holder at the start of the first trading window, or the first trading day after the restrictions are lifted, even if they are lifted temporarily. It is important to note that section 83A-310 deems Division 83A to have never applied to an ESS interest that is forfeited or lost provided the forfeiture did not arise because of certain choices made by an individual. Roll-over relief for corporate restructures Where employees have a deferred tax liability on a discount on an ESS interest and a takeover or corporate restructure of their employer occurs triggering a disposal or breaking the employment relationship, roll-over relief may be available. In particular, where: • an arrangement is entered into that results in the original company becoming the subsidiary of another company, or • there is a change in the ownership of the existing company that results in any ESS interests in the old company being replaced, wholly or partly, by ESS interests in one or more other companies, the new interests are treated as continuations of the old interests under section 83A-130. However, the new interests must be ordinary shares or rights over ordinary shares and must reasonably be regarded as matching the old interests under subsections 83A-130(4) and (5). Note that, under subsection 83A-130(6), new employment is treated as a continuation of the old employment if it results from a 100% takeover, restructure or demerger. For Division 83A purposes, employment does not cease until the taxpayer ceases to be employed anywhere within the relevant company group. Further, the roll-over relief is only available to employees who, at the time of acquisition of the new interests, do not hold a beneficial interest in more than 10% of the shares in the new company, and are not in a position to cast more than 10% of the maximum number of votes at a general meeting. Any consideration paid by the employee for the ESS interests is spread among the matching ESS interests in proportion to their market values immediately after the corporate restructure. This allows the apportionment of the cost base and the calculation of the discount for tax purposes for those ESS interests that are not subject to the roll-over and those that are. | Detailed Reasoning - Application to your situation: When you ceased employment with Company A before DD MM 20YY, you held X vested RSUs, what you were allowed to retain, the remaining unvested RSUs were forfeited. You then sold X vested RSUs to Company A, leaving X vested RSUs. On DD MM 20YY the Company A was restructured, with New Company A being incorporate. At the time your RSUs were replaced with new RSUs in the New Company A entity. When you signed the Company A, 20YY XXX Equity Incentive Plan, Restricted Stock Unit Agreement (the Agreement), as set out in the Company A, Amended and Restated 20YY Equity Incentive Plan, as amended on DD MM 20YY, you agreed to be bound by the terms and conditions. Numerous clauses in the Agreement, refer to the Administrator and in particular, Clause 4.2 Substitute Awards, states that the Administrator ' may grant Awards in substitution for any stock or stock-based awards granted prior to such merger or consolidation'. Clause 5 provides that the Administrator may grant or purchase RSUs, subject to the right of the Company to repurchase all or part of such shares. When you received the new vested RSUs in the New Company A, in exchange for the old vested RSUs, you were no longer an employee of the New Company A. There was no deferred taxing point when you received new vested RSUs, and therefore you became assessable on the discounted vested RSUs. | Detailed Reasoning - Question 2: Is the market value of the X vested RSUs included in your assessable income for the 20YY income year? | Detailed Reasoning - Reasons for decision: You were provided with an ESS statement by Company A reporting the discount from the deferral scheme of $X, that would be declared in your 20YY Income Tax Return. | Detailed Reasoning - Question 3: Can the Class Ruling CR be applied to you to allow a scrip for scrip treatment under section 83A-130 of the ITAA 1997? | Summary: CR applies to certain holders of RSUs in the entity formerly known as Company A, where the RSUs were replace with RSUs in the New Company A. Point X of paragraph X provides that ' you were employed by New Company A, or a subsidiary of New Company A, at the time you acquired the new interests (paragraph 83A-130(9)(a)). As you ceased employment with Company A before DD MM 20YY, the class ruling does not apply to the new RSUs issued to you in the New Company A. | Detailed Reasoning - Reasons for decision: Roll-over relief for corporate restructures Where employees have a deferred tax liability on a discount on an ESS interest and a takeover or corporate restructure of their employer occurs triggering a disposal or breaking the employment relationship, roll-over relief may be available. In particular, where: • an arrangement is entered into that results in the original company becoming the subsidiary of another company, or • there is a change in the ownership of the existing company that results in any ESS interests in the old company being replaced, wholly or partly, by ESS interests in one or more other companies, the new interests are treated as continuations of the old interests under section 83A-130. However, the new interests must be ordinary shares or rights over ordinary shares and must reasonably be regarded as matching the old interests under subsections 83A-130(4) and (5). Note that, under subsection 83A-130(6), new employment is treated as a continuation of the old employment if it results from a 100% takeover, restructure or demerger. For Division 83A purposes, employment does not cease until the taxpayer ceases to be employed anywhere within the relevant company group. Further, the roll-over relief is only available to employees who, at the time of acquisition of the new interests, do not hold a beneficial interest in more than 10% of the shares in the new company, and are not in a position to cast more than 10% of the maximum number of votes at a general meeting. For ESS interests acquired before DD MM 20XX, the relevant percentage for ownership and voting rights was 5%. Any consideration paid by the employee for the ESS interests is spread among the matching ESS interests in proportion to their market values immediately after the corporate restructure. This allows the apportionment of the cost base and the calculation of the discount for tax purposes for those ESS interests that are not subject to the roll-over and those that are. | Detailed Reasoning - Application to your situation: Your employment with Company A ceased by DD MM 20YY. The Company A restructure, to New Company A, occurred on DD MM 20YY. Rollover relief only applies to those that were employees at the time of the restructure. Employment after the restructure is not considered to be a break in the employment contract. As you were no longer an employee of Company A you are not entitled to apply the rollover relief to the new RSUs that were issued to you when Company A restructured.