Private ruling: Employee Share Schemes
Published: May 2014
Ruling period: Income Tax | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016 | Year ended 30 June 2017 | Year ended 30 June 2018 | FBT | Year ended 31 March 2014 | Year ended 31 March 2015 | Year ended 31 March 2016 | Year ended 31 March 2017 | Year ended 31 March 2018
Date scheme commenced: 1 July 2013

Ruling: Q6: Will the Commissioner seek to apply section 67 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) to the proposed arrangement? Advice Answers No


Relevant legislative provisions: Income Tax Assessment Act 1997 - section 8-1 | Income Tax Assessment Act 1997 - section 83A-10 | Income Tax Assessment Act 1997 - section 83A-210 | Income Tax Assessment Act 1997 - subsection 130-85(4) | Income Tax Assessment Act 1997 - section 995-1 | Income Tax Assessment Act 1936 - section 177A | Income Tax Assessment Act 1936 - section 177C | Income Tax Assessment Act 1936 - section 177D | Fringe Benefits Tax Assessment Act 1986 - subsection 136(1) | Fringe Benefits Tax Assessment Act 1986 - section 66 | Fringe Benefits Tax Assessment Act 1986 - section 67

Reasons for decision: Detailed Reasoning - Detailed reasoning: An employer is entitled to a deduction under section 8-1 of the ITAA 1997 for a contribution paid to the trustee of an EST that is either: • incurred in gaining or producing income; or • necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income (second limb). to the extent the contribution is not private or domestic in nature, is not of capital or of a capital nature, does not relate to the earning of exempt income or non-assessable non-exempt income and deductibility is not precluded by another provision of the ITAA 1997 or ITAA 1936. To qualify for a deduction under section 8-1 of the ITAA 1997, a contribution to the trustee of an EST must be incurred. As a broad guide, a taxpayer incurs an outgoing at the time the taxpayer owes a present money debt that they cannot escape. This must be read subject to the propositions developed by the courts, which are discussed in more detail in Taxation Ruling TR 97/7 and Taxation Ruling TR 94/26. A contribution made to the Trustee of an EST is incurred only when the ownership of that contribution passes from an employer to the trustee of the EST and there is no circumstance in which the employer can retrieve any of the contribution - Pridecraft Pty Ltd v. Federal Commissioner of Taxation [2004] FCAFC 339; 2005 ATC 4001; (Pridecraft) ; Spotlight Stores Pty Ltd v. Commissioner of Taxation [2004] FCA 650] 2004 ATC 4647; 55 ATR 745; (Spotlight) . The stated purpose of the entity in establishing and funding its employee share plans is to provide an employee equity incentive plan to further align the interests of staff and shareholders by staff earning significant rewards from the acquisition of equity in the company. The entity has established an EST and advised that it will make irretrievable contributions to it in order to provide eligible employees with Shares. The entity has advised that it will be making contributions to the trust to satisfy existing and future equity interests / awards made to its employees. The awards / equity interests offered to its Senior Managers under the SMLTIP are performance rights or options. These contributions are an outgoing by the entity in funding an employee incentive scheme for its employees. It is anticipated that such contributions will be made by the entity when participants exercise their options or rights under the LTIP. Furthermore the entity's shares will be acquired either on market or via subscription (clause 6.1(a) of the Trust Deed. The contributions made by the entity to the EST will be a recurring outgoing which forms part of the remuneration costs of the participants. | Detailed Reasoning - Necessarily incurred in carrying on a business: To be deductible under section 8-1 of the ITAA 1997, a contribution must have been incurred in gaining or producing assessable income or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. In order to satisfy the second limb of section 8-1 of the ITAA 1997, there must be a relevant connection between the outgoing and the business. An expense will have a relevant connection to the business when it is 'desirable or appropriate in the pursuit of the business ends of the business' (Ronpibon Tin NL and Tongkah Compund NL v. FC of T (1949) 78 CLR 47; (1949) 8 ATD 431; (1949) 4 AITR 236 (Ronpibon); Manga Alloys & Research Pty Ltd v. Federal Commissioner of Taxation (1980) ATC 4542; (1980) 11 ATR 286 (Magna Alloys). Where an employer: • carries on a business for the purpose of gaining or producing assessable income and engages employees in the ordinary course of carrying on that business • makes a contribution to the trustee of an EST • at the time the contribution is made, the primary purpose of the contribution is for it to be applied, within a relatively short period of time, to the direct provision of remuneration of employees (who are employed in that business) Then, such a contribution would ordinarily satisfy the nexus of being necessarily incurred in carrying on that business. In regards to contributions satisfying the nexus of being necessarily incurred in carrying on a business, the entity: • employs a workforce to undertake its business. • contributes funds to the trustee of the EST to acquire shares in the entity, either on market or via a subscription for new shares, to reward, motivate, attract and retain employees, including key personnel. • ensures shares acquired by the Trustee will be allocated to the relevant employees who will become absolutely entitled to them (refer clause 6.6(b) of Trust Deed). Given these facts, it is considered that the irretrievable contributions made to the EST by the entity, for the purpose of remunerating employees are an outgoing on carrying on the entity's business for the purpose of gaining or producing assessable income. | Detailed Reasoning - Character of a contribution: Where a contribution satisfies either limb of subsection 8-1(1) of the ITAA 1997, it may still be capital or of a capital nature. Pursuant to subsection 8-1(2) of the ITAA 1997, the contribution will not be deductible to an employer under section 8-1 to the extent to which it is capital or of a capital nature. Whether an outgoing is capital or revenue in nature can generally be determined by the test articulated by Dixon J in Sun Newspapers Ltd v. Federal Commissioner of Taxation (1938) 61 CLR 337; 5 ATD 87; (1938) 1 AITR 403 (Sun Newspapers case): There are, I think, three matters to be considered, (a) the character of the advantage sought, and in this its lasting qualities may play a part, (b) the manner in which it is to be used, relied upon or enjoyed, and in this and under the former head recurrence may play its part, and (c) the means adopted to obtain it; that is, by providing a periodical reward or outlay… A contribution to the trustee of an EST is of capital or of a capital nature, where the contribution secures for an employer an asset or an advantage of an enduring or lasting nature that is independent of year to year benefits that the employer derives from a loyal and contended workforce. Where a contribution is ultimately and in substance, applied by the trustee of an EST to subscribe for equity interests in the employer (for example shares), the employer has also acquired an asset or advantage of an enduring nature. The combined operation of subsections 8-1(1) and 8-1(2) of the ITAA 1997 may require apportionment of a loss or outgoing in deductible and non-deductible components, where a single loss or outgoing is incurred for more than one purpose or on items of a differing nature. Where a contribution is made for the purpose of securing for the employer advantages of a revenue and capital nature, but the advantages of a capital nature are only expected to be very small or trifling by comparison, apportionment may not be required. In this case, the outgoings incurred by the entity in carrying on its business are either not capital in nature or any capital component is sufficiently small or trifling such that the Commissioner would not seek to apportion the deduction. | Detailed Reasoning - Conclusion: The irretrievable contributions the entity makes to the EST, to acquire shares, whether on-market purchase or subscription, are allowable under section 8-1 of the ITAA 1997. | Detailed Reasoning - Question 2: (a) is the deduction for the entity in respect of the irretrievable contributions to the EST allowed in the same year of income when the contribution is made to the EST provided it is in respect of shares that have been granted to employees or rights to acquire shares that have been granted to employees pursuant to section 83A-210 of the ITAA 1997? | Detailed Reasoning - Detailed Reasoning: The provision of money to the EST by the employer for the purpose of remunerating its employees under an ESS is an outgoing in carrying on the employers business and is deductible under section 8-1 of the ITAA 1997. The deduction under section 8-1 of the ITAA 1997 would generally be allowable in the income year in which the employer incurred the outgoing, but under certain circumstances, the timing of the deduction is specifically determined under section 83A-210 of the ITAA 1997. With effect from 1 July 2009, section 83A-210 of the ITAA determines the timing of a deduction for contributions as follows: 83A-210 If: (a) at a particular time, you provide another entity with money or property: (i) under an arrangement, and; (ii) for the purposes of enabling an individual (the ultimate beneficiary) to acquire directly or indirectly, an ESS interest under an employee share scheme in relation to the ultimate beneficiary's employment (including past or prospective employment); and (b) that particular time occurs before the time (the acquisition time) the ultimate beneficiary acquires the ESS interest; then, for the purposes of determining the income year (if any) in which you can deduct an amount in respect of the provision of money or other property, you are taken to have provided the money or other property at acquisition time. Section 83A-210 of the ITAA 1997 will only apply if there is a relevant connection between the money provided to the trustee, and the acquisition of ESS interests (directly or indirectly) by the entity under the SMLTIP in relation to the employees employment. An ESS interest in a company is defined in subsection 83A-10(1) of the ITAA 1997 as either a beneficial interest in a share in the company or a beneficial interest in a right to acquire a beneficial interest in a share in the company. Under the Plan, a performance right or option granted to an employee will be an ESS interest as it is a right to acquire a beneficial interest in a share in the entity. The share acquired to satisfy such a right or option is granted under the ESS to an employee. The granting of the beneficial interests in the performance rights or options, the provision of money to the trustee under the arrangement, the acquisition and holding of the shares by the Trustee of the EST and the allocation of shares to the participating employees are all interrelated components of the Plan. As one of those components, the provision of money to the Trustee of the EST necessarily allows the scheme to proceed. Consequently, the provision of money to the Trustee of the EST to acquire the entity's shares is considered to be for the purpose of enabling the participating employees, indirectly as part of the Senior Management LTIP to acquire the performance rights or options. If that money is provided before the rights or options are acquired, then section 83A-210 of the ITAA 1997 will apply. However, section 83A-210 of the ITAA 1997 will not apply to a deduction for the purchase of shares to satisfy the obligation arising from Rights already granted, and that deduction is accordingly allowable to the entity in the year in which the money was paid to the Trustee of the EST, under section 8-1 of the ITAA 1997. (b) If irretrievable contributions to the EST are made to facilitate grants of rights which have not yet occurred at the time of the contribution, is the deduction for the entity in respect of irretrievable contributions to the EST allowed, in the same year of income in which the rights in question are granted to employees pursuant to section 83A-210 of the ITAA 1997? | Detailed Reasoning - Conclusion: If any amount of money is used by the trustee of the EST to purchase excess shares intended to meet a future obligation arising from a future grant of rights, the excess payment occurs before the employees acquire the relevant rights (ESS interests) under the scheme. Section 83A-210 of the ITAA 1997 will apply in that case and the excess payment will only be deductible to the entity in the year of income when the relevant rights are subsequently granted to the employees. | Detailed Reasoning - Question 3: Will Part IVA of the ITAA 1936 apply to the arrangement where irretrievable contributions are made to the trustee of the EST to fund the acquisition of the entity's shares? | Detailed Reasoning - Detailed Reasoning: A consideration of all the factors referred to in paragraph 177D(b) of the ITAA 1936 leads to the conclusion that the dominant purpose of the scheme is to remunerate to the entity's employees who participate in the scheme in a form that promotes the company's business objectives, rather than to obtain a tax benefit. Accordingly, the Commissioner will not make a determination that Part IVA of the ITAA 1936 applies to deny in part, or in full, any deduction claimed by the entity in relation to irretrievable contributions made by the entity to the Trust to fund the acquisition of employer shares in accordance with the scheme outlined. | Detailed Reasoning - Question 4: Is the provision of shares to employees pursuant to the Plan arrangements subject to fringe benefits tax? | Detailed Reasoning - Detailed reasoning: An employer's liability to fringe benefits tax (FBT) arises under section 66 of the FBTAA which provides that tax is imposed in respect of the fringe benefits taxable amount of an employer for the relevant year of tax. The fringe benefits taxable amount is calculated under the FBTAA by reference to the taxable value of each fringe benefit provided. No amount will be subject to FBT unless a 'fringe benefit' is provided. In general terms, 'fringe benefit' is defined in subsection 136(1) of the FBTAA 1986 as being a benefit provided to an employee or an associate of an employee 'in respect of' the employment of the employee. However, certain benefits are excluded from being a 'fringe benefit' by virtue of paragraphs (f) to (s) of the 'fringe benefit' definition. Paragraph (h) of the definition of 'fringe benefit' states that a fringe benefit does not include: (h) a benefit constituted by the acquisition of an ESS interest under an employee share scheme (within the meaning of the Income Tax Assessment Act 1997) to which Subdivision 83AB or 83AC of that Act applies. Subsection 83A - 10(1) of the ITAA 1997 defines an ESS interest as: 83A - 10(1) An ESS interest, in a company, is a beneficial interest in: (a) a share in the company (b) a right to acquire a beneficial interest in a share in the company Subsection 83A - 10(2) of the ITAA 1997 defines an employee share scheme as: 83A - 10(2) An employee share scheme is a scheme under which ESS interests in a company are provided to employees, or associates of employees, including past or prospective employees of: (a) the company, or (b) subsidiaries of the company in relation to the employees employment. The entity has stated that it will grant ESS interests (comprising Performance Rights and Options) to the participants of its SMLTIP. The ESS interests offered to participants in the SMLTIP are offered at a discount and are in connection with the participant's employment. It is accepted that the Rights and Options described in this private ruling comprise an employee share scheme and incorporate the use of an EST that is an employee share trust within the meaning of subsection 130-85(4) of the ITAA 1997. It is also accepted that the SMLTIP is an employee share scheme under which the relevant ESS interests (being the beneficial interests in the shares) are acquired by employees of the entity (or their associates), and the acquisition of those ESS interests is in relation to the employees employment. Accordingly, the acquisition of ESS interests pursuant to the SMLTIP will not be subject to fringe benefits tax on the basis that they are part of an employee share scheme and thereby excluded from the definition of 'fringe benefit' pursuant to subsection 136(1) of the FBTAA. | Detailed Reasoning - The provision of shares arising from the exercise of Rights and Options: Subsection 83A - 20(2) of the ITAA 1997 provides: 83A-20(2) However, this subdivision does not apply if the ESS interest is a beneficial interest in a share that you acquire as a result of exercising a right, if you acquired a beneficial interest in the right under an employee share scheme. Essentially, this means that the entity's shares granted under the SMLTIP, to satisfy rights or options exercised, are not ESS interests acquired under an employee share scheme. Consequently, the acquisition of the shares (as a result of exercising the rights or options) is not excluded from being a fringe benefit by virtue of the definition of fringe benefit in subsection 136(1) of the FBTAA. However, for a benefit to be a fringe benefit, it must be provided in respect of the employment of the employee. The meaning of the phrase 'in respect of' was considered by the Full Federal Court in J & G Knowles & Associates Pty Ltd v. Federal Commissioner of Taxation (2000) 96 FCR 402; 2000 ATC 4151; (2000) 44 ATR 22. The court at ATC 4158 said: Whatever question is to be asked, it must be remembered that what must be established is whether there is a sufficient or material, rather than a, casual connection or relationship between the benefit and the employment. The situation is similar to that which existed in FC of T v. McArdle 89 ATC 4051; (1988) 19 ATR 1901 where an employee was granted valuable rights in respect of his employment which he subsequently surrendered in return for a lump sum payment. The Full Federal Court noted that what had occurred under the surrender agreement was not the granting of a valuable benefit, but the exploitation of rights received from the employer in previous years. When an employee accepts to participate in the SMLTIP, they obtain a right to acquire a beneficial interest in a share in the entity and this right constitutes an ESS interest. When this right is subsequently exercised, any benefit received would be in respect of the exercise of the right, and not in respect of employment. Therefore, the benefit that arises to an employee upon the exercise of a right under the LTIP will not give rise to a fringe benefit as a benefit has not been provided in respect of the employment of the employee. | Detailed Reasoning - Question 5: Are irretrievable contributions of money to the trustee of an EST to fund the acquisition of shares in the entity subject to fringe benefits tax? | Detailed Reasoning - Detailed Reasoning: Paragraph (ha) of the definition of 'fringe benefit' in subsection 136(1) of the FBTAA states that a fringe benefit does not include: (ha) a benefit constituted by the acquisition of money or property by an employee share trust (within the meaning of the Income Tax Assessment Act 1997); An employee share trust (EST) is defined in subsection 995-1(1) of the ITAA 1997 as having the meaning given by subsection 130-85(4) of the ITAA 1997. Subsection 130-85(4) of the ITAA 1997 provides that an EST for an employee share scheme (having the meaning given by subsection 83A -10(2) of the ITAA 1997) is a trust whose sole activities are: (a) obtaining shares or rights in a company; and (b) ensuring that ESS interests in the company that are beneficial interests in those shares or rights are provided under the employee share scheme to employees, or to associates of employees, of: (i) the company; or (ii) a subsidiary of the company; and (iii) other activities that are merely incidental to the activities mentioned in paragraphs (a) and (b). A payment of money by the entity to the EST is therefore not subject to FBT provided that the sole activities of the trust are obtaining shares or rights to acquire shares in the entity. Clause 5.16 of the Trust Deed provides the following Sole activities test: Without limiting the generality of clause 5.7, the Company and the Trustee agree that the Trust will be managed and administered so that it satisfies the definition of "employee share scheme" for the purposes of section 130-85(4) of the ITAA 1997. For the avoidance of doubt, the Trust is not permitted to undertake any activities that would not be allowed by this definition. Undertaking the activities mentioned in paragraphs 130-85(4)(a) and 130-85(4)(b) of the ITAA 1997 will also require that the trustee undertake incidental activities that are a function of managing the option and share plans, and administering the EST. For the purposes of paragraph 130-85(4)(c) of the ITAA 1997, ATO ID 2007/179 sets out the Commissioner's views on when an employee share trust satisfies the sole activities test. In particular, the Commissioner considers that activities that are a necessary function of managing an employee share scheme and administering a trust will satisfy the sole activities test. Such activities include: • the opening and operating of a bank account to facilitate the receipt and payment of money • the receipt of dividends in respect of shares held by the EST on behalf of an employee, and their distribution to an employee; • the receipt of dividends in respect of unallocated shares and using those dividends to acquire additional shares for the purposes of the employee share scheme; • dealing with shares forfeited under an employee share scheme including the sale of forfeited shares and using the proceeds of sale for the purpose of the employee share scheme; • the transfer of shares to employee beneficiaries or the sale of shares on behalf of an employee beneficiary and the transfer to the employee of the net proceeds of the sale of those shares; • the payment or transfer of trust income and property to the default beneficiary on the winding up of the trust where there are no employee beneficiaries. • receiving and immediately distributing shares under a demerger Activities that result in employees being provided with additional benefits (such as the provision of financial assistance, including a loan to acquire the shares) are not considered merely incidental. The scheme is an employee share scheme within the meaning of subsection 83A-10(2) of the ITAA 1997 because it is a scheme under which rights to acquire beneficial interests in shares in the entity are provided to employees in relation to the employee's employment. Under the SMLTIP, the entity has established the Trust to acquire shares in the entity and to allocate those shares to employees. Furthermore it is proposed that future allocations of shares under the ESP will be administered by the EST. Therefore, paragraphs 130-85(4)(a) and 130-85(4)(b) of the ITAA 1997 are satisfied because: • The Trust acquires shares in the entity; and • The Trust ensures that the ESS interests, being beneficial interests in those shares, are provided under an employee share scheme, to the employees in accordance with the Trust Deed and relevant Rules of the LTIP and the ESP. The Trust is an employee share trust as defined in subsection 995-1 of the ITAA 1997, as the activities of the Trust in acquiring and allocating ESS interests meet the requirements of paragraphs 130-85(4)(a) and 130-85(4)(b) of the ITAA 1997 and its other activities are merely incidental to those activities in accordance with paragraph 130-85(4)(c) of the ITAA 1997. As such, paragraph (ha) of the definition of fringe benefit in subsection 136(1) of the FBTAA excludes the contributions to the trustee of the Trust from being a fringe benefit. Accordingly, the employer will not be required to pay FBT in respect of the irretrievable cash contributions it makes to the trustee of the EST to fund the acquisition of the entity's shares in accordance with the Trust Deed. | Detailed Reasoning - Question 6: Will the Commissioner seek to apply section 67 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) to the proposed arrangement? | Detailed Reasoning - Detailed Reasoning: Section 67 is the general anti-avoidance provision in the FBTAA. The operation of section 67 is comparable to Part IVA of the ITAA 1936, in that the section requires the identification of an arrangement; a tax benefit obtained by the employer that was the sole or dominant purpose for a person entering into the arrangement and is activated by the making of a determination by the Commissioner. PS LA 2005/24 provides guidance on the application of section 67 of the FBTAA. Paragraphs 145-148 state: 145. Section 67 is the general anti avoidance provision in the FBTAA. The operation of section 67 is comparable to Part IVA, in that the section requires the identification of an arrangement and a tax benefit, includes a sole or dominant purpose test and is activated by the making of a determination by the Commissioner. The definition of 'arrangement' in subsection 136(1) of the FBTAA is virtually identical to the definition of 'scheme' in section 177A of Part IVA. 146. Subsection 67(1) of the FBTAA is satisfied where a person or one of the persons who entered into or carried out an arrangement or part of an arrangement under which a benefit is or was provided to a person, did so for the sole or dominant purpose of enabling an eligible employer or the eligible employer and an other employer(s) to obtain a tax benefit. 147. An objective review of the transaction and the surrounding circumstances should be undertaken in determining a person's sole or dominant purpose in carrying out the arrangement or part of the arrangement. Section 67 differs from paragraph 177D(b) in Part IVA in that it does not explicitly list the factors that should be taken into account in determining a person's sole or dominant purpose. 148 Subsection 67(2) of the FBTAA provides that a tax benefit arises in respect of a year of tax in connection with an arrangement if under the arrangement: (i) a benefit is provided to a person (ii) an amount is not included in the aggregate fringe benefits amount of the employer; and (iii) that amount would have been included and or could reasonably be expected to be included in the aggregate fringe benefits amount, if the arrangement had not been entered into. The Commissioner will only make a determination under section 67 of the FBTAA if the arrangement resulted in the payment of less FBT than would be payable but for entering into the arrangement. In Miscellaneous Taxation Ruling MT 2021 under the heading "Appendix, Question 18" on the application of section 67, the Commissioner states: …As mentioned in the explanatory memorandum to the FBT law, section 67 may only apply where there is an arrangement under which a benefit is provided to a person and the fringe benefits taxable amount in respect of that benefit is either nil or less than it would have been but for the arrangement… ATO Practice Statement - Law Administration PS LA 2005/24 provides instructions and practical guidance to tax officers on the application of Part IVA and other General Anti Avoidance rules. Paragraph 151 of PS LA 2005/24 states: 151. the approach outlined in this practice statement (refer to paragraph 69 to 113) to the counterfactual and the sole or dominant purpose test in Part IVA is relevant and should be taken into account by Tax officers who are considering the application of section 67 of the FBTAA. Under the entity's SMLTIP, the benefits provided to the trustee by way of irretrievable cash contributions to the EST and to participants by way of the provision of Rights or Options will not be subject to FBT. Consequently, no amount could reasonably be expected to be included in the aggregate fringe benefits amount, attributable to the scheme, if the arrangement had not been entered into. Therefore, the fringe benefits tax is not any less than it would have been but for the arrangement. Accordingly, the Commissioner will not make a determination that section 67 of the FBTAA applies to include an amount in the aggregate fringe benefits amount of the entity in relation to a tax benefit obtained under the Plans.

Are irretrievable cash contributions by the entity to the trustee of an employee share trust (EST) to fund the acquisition of shares in the entity an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | (a) is the deduction for the entity in respect of the irretrievable contributions to the EST allowed in the same year of income when the contribution is made to the EST provided it is in respect of shares that have been granted to employees or rights to acquire shares that have been granted to employees or rights to acquire shares that have previously been granted to employees pursuant to section 83A-210 of the ITAA 1997? | Will Part IVA of the Income Tax Assessment Act 1936 (ITAA 1936) apply to the arrangement where irretrievable contributions are made to the trustee of the EST to fund the acquisition of the entity's shares? | Relevant facts: The scheme the subject of the ruling has been ascertained from the following documents: | Rules of the entity's Senior Management Long Term Incentive Plan (SMLITP) | Directors Report Extract from the entity's 2011 Annual Report | The entity's SMLITP Offer Letter | The entity's Share Trading Policy | The entity's Employee Share Plan Trust (Trust Deed) | Assumptions: Employees / Participants of the Incentive Plans acquire the ESS interests at a discount. | Are irretrievable cash contributions by the entity to the trustee of an employee share trust (EST) to fund the acquisition of shares in the entity an allowable deduction under section 8-1 of the ITAA 1997?