Private ruling: Employee share scheme
Date of advice: 11 August 2020
Published: September 2020

Ruling: Q1: Will Company P as head entity of the Company P income tax consolidated group obtain an income tax deduction, pursuant to section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) in respect of the irretrievable payments made by Company P or any subsidiary member of the consolidated group to the Trustee to fund the acquisition by the Trust of Company P's shares either on market or via a new subscription of shares? | A1: Yes | Q2: Will Company P as head entity of the Company P income tax consolidated group obtain an income tax deduction, pursuant to section 8-1 of the ITAA 1997, in respect of costs incurred by Company P or any subsidiary member of the consolidated group in relation to the on-going administration of the Trust? | A2: Yes | Q3: Will irretrievable payments made by Company P or any subsidiary member of the Company P income tax consolidated group to the Trustee, to fund the acquisition by the Trust of Company P shares either on market or via a new subscription of shares, be deductible to Company P under section 8-1 of the ITAA 1997 at a time determined by section 83A-210 of the ITAA 1997? | A3: Yes | Q4: If the Trust satisfies its obligation under the Employee Incentive Plan ( thePlan) by subscribing for new shares in Company P will the subscription proceeds be included in the assessable income of Company P pursuant to sections 6-5 or 20-20 of the ITAA 1997, or trigger a capital gains tax ('CGT') event under Division 104 of the ITAA 1997? | A4: No | Q5: Will the Commissioner seek to make a determination that Part IVA of the Income Tax Assessment Act 1936 ( ITAA 1936) applies to deny, in part or full, any deduction claimed by Company P in respect of the irretrievable cash contributions made by Company P or any subsidiary member of the tax consolidated group to the Trustee to fund the subscription for, or acquisition on-market, of Company P's shares by the employee share trust (EST)? | A5: No | Q6: Will the provision of Rights by Company P to employees of Company P or any subsidiary of Company P under the Plan be a 'fringe benefit' within the meaning of the term in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A6: No

Relevant facts and circumstances: All legislative references are to provisions of the Income Tax Assessment Act 1997 (ITAA 1997) unless otherwise indicated. Background Company P is an Australian listed company which undertakes its primary business activities through a number of wholly owned subsidiaries. Company P aims to maintain a remuneration policy where employee reward is aligned with the achievement of the company's overall strategic objectives, outcomes and creation of value for shareholders. Company P rewards key employees with a mix of remuneration commensurate with their position and responsibilities. Remuneration structures are reviewed regularly to ensure that: - remuneration is competitive by market standards - rewards are linked to strategic goals and performance, and - accountabilities and deliverables are clearly defined to minimise potential conflicts of interest and promote effective decision-making. Remuneration of employees is evaluated against comparative positions in similar companies and industries. The remuneration of key employees comprises the following elements: - Fixed remuneration, which includes base pay and other benefits - Performance linked remuneration, which consists of performance rights or options, and - Employee share ownership, through the grant of ordinary shares subject to dealing restrictions granted under a salary sacrifice, tax exempt or tax deferred arrangement. Company P's Employee Incentive Plan ( thePlan) was established in 2010.The Plan provides Company P the flexibility to offer performance rights, options or shares to its executive directors and employees. The Plan is administered in accordance with the terms summarised below. Company P Employee Incentive Plan (the Plan) The Plan was designed with flexibility to issue various types of incentive instruments to employees. Incentives may be provided in the form of rights or options, which represent rights to acquire shares in the Company (collectively referred to as Awards), and restricted shares (Restricted Shares). The incentives may or may not be subject to vesting conditions, depending on the type of Award. The Plan allows Awards to be settled in cash at the discretion of the Board, where this was provided for in the invitation letter to the relevant employee. The purpose of the Plan is to allow the Board to make Offers of Incentive Securities to Eligible Employees. The Plan broadly operates as follows: 1. Eligible employees (Participants) may receive a grant of Awards and/or Restricted Shares under the Plan. 2. Subject to the Board's discretion, Invitation letters sent to the Participants should outline: a. the type and number of Awards and/or Restricted Shares being offered, or the method by which the number will be calculated b. the amount (if any) that will be payable for the grant of Awards and/or Restricted Shares c. any vesting conditions or other conditions that apply, including and vesting period d. the terms of exercise for an Award (where exercisable), including the period(s) during which exercise is permitted e. that Awards will only be settled through an allocation of Shares or by making a cash payment (as applicable) where the Board has made a determination pursuant to the Plan rules at the time of the offer f. the circumstances in which Awards may lapse, Restricted Shares may be forfeited or a Participant's entitlement to Awards or Restricted Shares may be reduced g. how Awards and/ or Restricted Shares may be treated if a Participant ceases employment with the Company h. details of any gift component i. any restrictions (including the period of restriction) on dealing in relation to an Award and/or Restricted Share, and j. where all or part of an offer is made as a salary sacrifice offer or tax exempt offer under the Plan, the offer should specify this. 3. Unless the Board determines otherwise, no payment is required for the grant of Awards, or Restricted Shares (other than a Restricted Share purchased by salary sacrifice). 4. From the date of issue, the Restricted Shares will entitle the Participant to voting rights, rights to receive dividends, bonus shares and to participate in rights issues. 5. The offer of a Restricted Share to a Participant that is intended to fall within the $1,000 tax exemption in Division 83A, will be subject to a restriction period from the date that the Restricted Shares are allocated until the earlier of: a. the date which is three years from the date of allocation of the Restricted Shares (or such other period that may be required under subdivision 83A-B, including such earlier time as the Commissioner of Taxation allows in accordance with subsection 83A-45(5)), and b. the date on which the Participant ceases to be employed by the Company. 6. Participants' Awards will lapse on the earliest of the following, subject to the Board's overriding discretion: a. 15 years after the date on which the Rights were allocated to the Participant, or any other date nominated as the expiry date in the Offer b. the Award lapsing in accordance with the Plan (including in accordance with a term of offer) c. failure to meet a vesting condition or any other condition applicable to the Award within the vesting period, or d. the receipt by the Company of a notice in writing from a Participant to the effect that the Participant has elected to surrender the Right. 7. Participants' Restricted Shares (except Restricted Shares that are tax-exempt) will be forfeited upon the earliest to occur of: a. the Restricted Shares being forfeited in accordance with a provision under the Plan b. the failure to meet any vesting or other conditions applicable to the Restricted Shares within the relevant vesting period, or c. the Participant electing to surrender the Restricted Shares by way of written notice to the Company. 8. Where a Participant ceases employment, the Board, in its discretion, may specify to the Participant how the Participant's Awards or Restricted Shares will be treated. This will vary depending on the circumstances in which the Participant's employment ceases (i.e. in the case of a bad leaver, the Awards or Restricted Shares will lapse or be forfeited and in the case of a good leaver, the Awards or Restricted Shares will continue on foot on cessation of employment). 9. Where there is a takeover, scheme of arrangement or winding up as described in the Plan, the Board may determine that all or a number of a Participant's Awards or Restricted Shares vest or cease to be subject to restrictions, and the treatment of any unvested Awards or Restricted Shares. 10. The Trust Deed allows the Company to use an Employee Share Trust to facilitate the allocation of shares to a Participant (i.e. the Trustee to subscribe for and/or acquire shares to be held on behalf of the Participants under the Plan). Indeterminate rights Awards granted under the Plan, where the Board has decided at the time of the Offer to settle them in Shares, will fall within the scope of Division 83A. However, Awards granted under the Plan where the Board has retained the flexibility to settle them in either cash or shares at the Board's discretion are not initially employee share scheme interests (ESS interests) as defined in section 83A-10. If the Board decides to settle the Awards in shares and not cash will the Awards become ESS interests and therefore fall within the scope of Division 83A. Where the Board decides to settle the Awards in shares, the Awards will then be treated as indeterminate rights and always having been ESS interests in line with subsection 83A-340(2). Company P Employee Share Trust (the Trust) The Trust provides Company P with greater flexibility to accommodate the incentive arrangements of the company both now and into the future as the group continues to expand its operations. The Trust provides capital management flexibility for Company P, in that the Trust can use the contributions made by Company P either to acquire shares in Company P on market, or alternatively to subscribe for new shares in Company P. Similarly, it provides a vehicle through which shares in Company P can be acquired and held in Company P on behalf of employees. In effect, this aspect allows Company P to satisfy Corporations Law requirements relating to companies dealing in their own shares. The Trustee of the Trust is an independent third party. Broadly, the Trust operates as follows: - The Trustee is required to comply with the Plan Rules. - The Trustee holds as General Trust Property the Settlement Sum and all other property including but not limited to money or shares (Trust Fund) that may be paid, transferred or credited to the Trust, on trust for all Participants in accordance with the Trust . - The Trustee may apply any part of the General Trust Property for the benefit of Participants, including, amongst other things, transferring shares, conferring legal title of shares upon or granting a beneficial interest in shares, to a Participant. - The Trustee will also set aside and hold for the benefit of Participants, parts of the Trust Fund as Allocated Trust Property, in which the Board will specify the Plan under which the Allocated Trust Property is to be set aside, and the Trustee will transfer the Allocated Trust Property to the Participant at the relevant time. - If shares are held by the Trustee as Allocated Trust Property, the Participant is presently entitled to receive all dividends and other distributions, bonus issues or other benefits payable to the Trustee in respect of those shares. - The Trustee has, amongst other things, the power to acquire and dispose of shares for the benefit of the beneficiaries of the Trust consistent with the purposes of the Trust. The Trustee can also take necessary steps to administer and maintain the Trust and the Trust Fund in line with the Trust Deed. - The Trustee may exercise voting rights on behalf of a Participant who has shares held as Allocated Trust Property in the Trust, where directed to do so. - Company P will ensure the Trustee has the necessary funds to do any act requested by the Board and to enable the Trustee to pay any costs and expenses incurred in accordance with the Trust Deed. - Subject to Company covenants set out in the Trust Deed, the Board has complete discretion in relation to payments made to the Trustee and there is nothing in the Trust Deed that allows the Trustee the right to such payment - The Trustee warrants, amongst other things, that it is a valid corporation that exists under the laws of its place of registration, and has the power to enter into and perform its obligations under the Trust Deed, and to carry out the transactions contemplated by the Trust Deed. - Company P is not a beneficiary of the Trust (nor may it become a beneficiary), and the Company P has no proprietary right or interest in any of the shares acquired by the Trustee. The Rights and Restricted Shares will be provided to employees at a discount. Any off-market acquisition of Company P shares will take place at market value. On-going administration expenses Company P has incurred or will incur various costs for the on-going administration by the Trustee of the Trust such as: - Employee plan record keeping - Production and dispatch of holding statements to employees - Costs incurred in the acquisition of shares on market, such as brokerage costs and the allocation of such shares to Participants, and - Costs incurred for the annual audit of the financial statements and annual income tax return of the Trust. Contributions to the Trust Where practicable, Company P will wait until the likelihood of the Awards vesting can be reasonably determined, or the exercise notice from Participants is received (where relevant), before providing the Trust with sufficient cash to acquire shares to satisfy the acquisition or subscription of shares related to those Awards. Where Awards may be settled in either cash or shares, Company P may make a contribution to the Trust in respect of those Awards that are likely to be settled in shares before the determination is made. Company P may make cash contributions to the Trust prior to the Awards vesting, or prior to the issue or grant of Restricted Shares and, where relevant, Awards being exercised by the Participants. In this case, Company P will contribute to the Trust sufficient funding to enable purchase of a reasonable quantity of shares in advance of when Awards are likely to be exercised or in advance of the grant date of the Restricted Shares. This enables the Trustee to hold enough shares in the Trust prior to when they need to be allocated to Participants, and avoids delays in times such as blackout trading periods. Assumption We make your Ruling based on the Assumption that the Board will not elect to settle vested Awards in cash.

Relevant legislative provisions: Income Tax Assessment Act 1936 Part IVA | Income Tax Assessment Act 1936 Section 177A | Income Tax Assessment Act 1936 Subsection 177D(2) | Income Tax Assessment Act 1936 Subsection 177F(1) | Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Subsection 8-1(1) | Income Tax Assessment Act 1997 Subsection 8-1(2) | Income Tax Assessment Act 1997 Section 20-20 | Income Tax Assessment Act 1997 Subsection 20-20(2) | Income Tax Assessment Act 1997 Subsection 20-20(3) | Income Tax Assessment Act 1997 Subsection 20-25(1) | Income Tax Assessment Act 1997 Section 20-30 | Income Tax Assessment Act 1997 Division 83A | Income Tax Assessment Act 1997 Section 83A-10 | Income Tax Assessment Act 1997 Subsection 83A-10(1) | Income Tax Assessment Act 1997 Subsection 83A-10(2) | Income Tax Assessment Act 1997 Section 83A-210 | Income Tax Assessment Act 1997 Section 102-20 | Income Tax Assessment Act 1997 Division 104 | Income Tax Assessment Act 1997 Paragraph 104-35(5)(c) | Income Tax Assessment Act 1997 Paragraph 104-155(5)(c) | Income Tax Assessment Act 1997 Subsection 974-70(1) | Income Tax Assessment Act 1997 Subsection 974-75(1) | Income Tax Assessment Act 1997 Subsection 995-1(1) | Fringe Benefits Tax Assessment Act 1986 Section 67, and | Fringe Benefits Tax Assessment Act 1986 Subsection 136(1).

Reasons for decision: Summary: Company P is entitled to income tax deductions pursuant to section 8-1 in respect of the irretrievable payments that it or any subsidiary makes to the Trustee to fund the acquisition by the Trust of Company P shares either on-market or via a new subscription of shares. | Detailed Reasoning - Detailed reasoning: In accordance with the Plan rules and Trust Deed, Company P or any subsidiary will make payments to the Trustee to enable the Trust to purchase shares in Company P to benefit employees. Shares will be acquired either on-market or via a new subscription of shares. The Trust Deed states that contributions made by Company P or any subsidiary to the Trustee will constitute accretions to the capital of the Trust and will be irretrievable to Company P and the subsidiaries, and non-refundable by the Trustee. As the funds are not repayable by the Trustee, the contributions will represent a permanent loss or outgoing incurred by Company P. Company P will generally incur the contributions at the time these are made to the Trust in accordance with the Plan rules and the Trust Deed. (See further the Detailed reasoning for Question 3 below as to the timing of deductions for the contributions). The Commissioner accepts that the contributions made by Company P or any subsidiary to the Trust are or will be incurred in gaining or producing the assessable income of Company P for the purposes of section 8-1. Company P's payments will generally be deductible when made (subject to the timing rule in section 83A-210, as they will enable Company P to meet its obligations arising from the grant of Rights under the Plan rules. Relevantly, the Commissioner's view as set out in ATO Interpretative Decision ATO ID 2010/103 states: The provision of money to the trustee of an employee share trust by the employer for the purpose of remunerating its employees under an employee share scheme is an outgoing in carrying on the employer's business and is deductible under section 8-1 of the ITAA 1997. It is not necessary to consider the 'necessarily incurred' part of this limb. Further, the contributions made by Company P or any subsidiary are not of, nor will be of a private or domestic nature (paragraph 8-1(2)(b)). However, paragraph 8-1(2)(a) provides that a loss or outgoing is not deductible under section 8-1 to the extent that it is a loss or outgoing of capital, or of a capital nature. The Commissioner accepts that the contributions to the Trust to fund the acquisition of shares are on revenue account and are not capital or capital in nature ( Spotlight Stores Pty Ltd v Federal Commissioner of Taxation (2004) 55 ATR 745 and Pridecraft Pty Ltd v Federal Commissioner of Taxation (2004) 58 ATR 210). Therefore, the contributions will be deductible to Company P pursuant to section 8-1 on the basis that the contributions are regular and recurrent employment expenses. Finally, the Commissioner accepts that the contributions made by Company P or any subsidiary to the Trust will be deductible irrespective of whether the Trust acquires shares on-market or via a new subscription of shares. Paragraph 1.72 of the Explanatory Memorandum to the Tax Laws Amendment (2009 Budget Measures No. 2) Bill 2009 which introducedDivision 83A recognises that a general deduction may be available to companies that provide securities under an employee share scheme and states: The employee share trust may acquire the securities by buying them on the market or by participating in a share issue by the employer. | Summary: Company P is entitled to an income tax deduction pursuant to section 8-1 in respect of costs it or a subsidiary incurs in relation to the on-going administration of the Trust. | Detailed Reasoning - Detailed reasoning: The Commissioner accepts that the on-going costs incurred by Company P or any subsidiary towards the on-going administration of the Trust are deductible to Company P under section 8-1. The on-going costs are considered to be regular and recurring expenses in connection with employees. The Commissioner also accepts these costs are deductible in accordance with the Commissioner's view set out in ATO Interpretative Decision ATO ID 2014/42 . | Summary: Irretrievable payments made by Company P or any subsidiary to fund the acquisition by the Trust of Company P shares either on-market or via a new subscription of shares, will be deductible to Company P pursuant to section 8-1, at the time determined by section 83A-210. | Detailed Reasoning - Detailed reasoning: The circumstances where some or all of the irretrievable payments are in excess of the amount required are addressed in the Detailed reasoning for Question 4 below. Section 83A-210 states that if: (a) at a particular time, you provide another entity with money or other 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 the money or other property, you are taken to have provided the money or other property at the acquisition time. As discussed in the Detailed reasoning for Question 1 above, a deduction is generally available to Company P pursuant to section 8-1 in the income year in which it or a subsidiary incurs the relevant outgoing. Where Company P makes irretrievable payments to the Trustee which are not in excess of the amount required, the Commissioner accepts that Company P will be entitled to the deduction pursuant to section 8-1 in the year of income the irretrievable payments are made. Section 83A-210 will not operate to defer the timing of the deduction in this instance. Therefore, a deduction will be available to Company P once the contributions are made to the Trust, even if the relevant shares have not been acquired and allocated (i.e. exercise on vesting), provided the contributions are not in excess of the amount required, or do not purchase shares in excess of the number required, to meet the exercise of Rights that have been acquired by employees (before or during the year of income) under the Plan. The Commissioner confirms that where contributions are made by Company P to the Trust: - In the same income year or a later income year to that in which the Rights are acquired by (i.e. granted to) the employee under the Plan, then as long as the contributions do not exceed a sufficient amount to acquire the requisite number of ESS interests, the deduction under section 8-1 will be available in the income year in which the contribution is made. | Summary: Where the Trust satisfies its obligation under the Plan by subscribing for new shares in Company P, the subscription proceeds payable by the Trust will not be included in the assessable income of Company P under sections 6-5 or 20-20, or result in a capital gains tax ('CGT') event happening under Division 104. | Detailed Reasoning - Detailed reasoning: Where an employee share trust subscribes for shares in the company, the Commissioner states in ATO ID 2010/155 that: In accordance with the ESS, the trustee either acquires the shares on market or it subscribes for the issue of shares using the funds provided by the employer. If the trustee subscribes for the issue of shares, it pays the full subscription price for the shares and the company receives a contribution of share capital from the trustee. The subscription price received by the company from the trustee is a capital receipt of the company. Accordingly, the subscription proceeds Company P receives from the Trust do not form part of the assessable income of Company P as ordinary income under section 6-5. 1. Recoupment by way of insurance or indemnity Subsection 20-20(2) states that: An amount you have received as recoupment of a loss or outgoing is an assessable recoupment if: (a) you received the amount by way of insurance or indemnity; and (b) you can deduct an amount for the loss or outgoing for the current year, or you have deducted or can deduct an amount for it for an earlier income year, under any provision of this Act. In accordance with the Plan rules and the Trust Deed, subscription proceeds received by Company P are not a recoupment by way of insurance or indemnity. Rather, the amount received by Company P is by way of subscription proceeds for the issue of shares to the Trust, which is a capital receipt of the company. Therefore, the subscription proceeds payable by the Trust are not included in the assessable income of Company P under subsection 20-20(2). 2. Assessable Recoupment - Other Recoupment (i.e. not by way of insurance or indemnity) Subsection 20-20(3) states that: An amount you have received as recoupment of a loss or outgoing ( except by way of insurance or indemnity) is an assessable recoupment if: (a) you can deduct an amount for the loss or outgoing for the current year; or (b) you have deducted or can deduct an amount for the loss or outgoing for an earlier income year; under a provision listed in section 20-30. In accordance with the Plan rules and the Trust Deed, the subscription proceeds received by Company P will not satisfy any of the items / provisions listed in the table in section 20-30. Therefore, the subscription proceeds will not constitute an assessable recoupment - other recoupment to Company P. 3. Capital Gains Tax (CGT) Section 102-20 states: 102-20 Ways you can make a capital gain or a capital loss You can make a *capital gain or *capital loss if and only if a *CGT event happens. The gain or loss is made at the time of the event. The only CGT events which may have possible application to the receipt of the subscription proceeds are: - CGT event D1 (Creating a contractual or other rights), or - CGT event H2 (Receipt for event relating to a CGT asset). For both CGT events D1 and H2, paragraphs 104-35(5)(c) and 104-155(5)(c) respectively provide that the events do not happen to a company that issues or allots equity interests. As the ordinary shares of Company P will satisfy the test for an equity interest as defined in subsection 974-75(1) (Item 1 of the Table) and subsection 974-70(1), neither CGT events D1 nor H2 will happen as the subscription amounts for new Company P shares by the Trustee to which this question relates involves Company P issuing or allotting equity interests. | Summary: The Commissioner will not seek to make a determination under section 177F of the ITAA 1936 (in respect of a scheme to which section 177D of the ITAA 1936 that is within Part IVA of the ITAA 1936) to deny, in part or full, any deduction claimed by Company P in respect of the irretrievable payments made by Company P or a subsidiary to the Trustee to fund the acquisition by the Trust of Company P shares either on market or via a new subscription of shares. | Detailed Reasoning - Detailed reasoning: Part IVA of the ITAA 1936 is a general anti-avoidance provision. It enables the Commissioner to cancel a tax benefit that has been obtained, or would but for section 177F of the ITAA 1936 be obtained, by a taxpayer in connection with a scheme to which Part IVA applies. The following requirements must all be present before the Commissioner can make a determination under subsection 177F(1) of the ITAA 1936: - a 'tax benefit', as defined in section 177C of the ITAA 1936 has been obtained or would (but for subsection 177F(1) of the ITAA 1936) be obtained - the tax benefit was, or would have been, obtained in connection with a 'scheme' as defined in section 177A of the ITAA 1936, and - having regard to the matters in subsection 177D(2) of the ITAA 1936, the person or persons who entered into or carried out any part of the scheme did so for the dominant purpose of enabling a taxpayer to obtain a tax benefit in connection with the scheme. In the present case, the Plan rules and the Trust Deed constitute a 'scheme' for the purposes of section 177A of the ITAA 1936. The deduction which Company P is entitled to is a tax benefit under paragraph 177C(1)(b) of the ITAA 1936. In considering the Relevant facts and circumstances and taking into account the commercial rationale for using a trust for the remuneration program, the Commissioner accepts that it cannot be objectively concluded that the person or persons who entered into or carried out any part of the scheme did so for the dominant purpose of enabling Company P to obtain a tax benefit in connection with the scheme. Therefore, as one of the requirements is not present, the Commissioner will not seek to make a determination under subsection 177F(1) of the ITAA 1936. | Summary: The provision of Rights by Company P to employees of Company P or of any subsidiary under the Plan rules will not be a 'fringe benefit' within the meaning of the term in subsection 136(1) of the FBTAA. | Detailed Reasoning - Detailed reasoning: The term 'fringe benefit' is defined in subsection 136(1) of the FBTAA. A fringe benefit only arises under this section where 'benefits' are provided by 'employers' to 'employees' or 'associates of employees'. However, paragraph (h) of the definition of 'fringe benefit' relevantly states that a fringe benefit does not include: ... 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 83A-B or 83A-C of that Act applies; ... Paragraph (h) uses the term 'ESS interest' and specifically excludes such an interest from the definition of a fringe benefit where it is acquired under an employee share scheme at a discount. As the Rights are subject to performance hurdles, the Commissioner accepts that Subdivision 83A-C applies to the Rights. Should Subdivision 83A-C not apply, the Commissioner accepts that Subdivision 83A-B would apply to the Rights as these will be provided at a discount. Therefore, the provision of Rights to employees under the Plan rules will not constitute the provision of a 'fringe benefit' in accordance with paragraph (h) of the term in subsection 136(1) of the FBTAA.