Private ruling: Employee share scheme
Date of advice: 18 November 2025
Published: 5 January 2026
Ruling period: For Questions 1, 2 and 3, income years ending 30 June 20XX to 30 June 20YY | For Questions 4 and 5, FBT years ending 31 March 20XX to 31 March 20YY
Date scheme commenced: DDMMYYYY

Ruling: Q1: Will the Company be entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the irretrievable cash contributions it makes to the Trust to fund the subscription for, or acquisition of, ordinary shares in the Company pursuant to the Plan? | A1: Yes. | Q2: Will section 83A-210 of the ITAA 1997 apply to modify the income year in which the Company can claim a deduction under section 8-1 of that Act for the irretrievable cash contributions it makes to the Trust to fund the subscription for, or acquisition of, ordinary shares in the Company pursuant to the Plan? | A2: No. | Q3: Will the Commissioner seek to make a determination under section 177F of the Income Tax Assessment Act 1936 (ITAA 1936) that Part IVA of that Act applies to deny, in part or in full, any deduction claimed by the Company for the irretrievable cash contributions it makes to the Trust to fund the subscription for, or acquisition of, ordinary shares in the Company pursuant to the Plan? | A3: No. | Q4: Will the provision of options to the employees of the Company's subsidiaries under the Plan constitute a 'fringe benefit' within the meaning of that term in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A4: No. | Q5: Will the irretrievable cash contributions made by the Company to the Trust, to fund the subscription for, or acquisition of, ordinary shares in the Company pursuant to the Plan constitute a 'fringe benefit' within the meaning of that term in subsection 136(1) of the FBTAA? | A5: No.

Relevant facts and circumstances: The Company is a company that is incorporated in Australia with its shares listed on the Australian Securities Exchange. The Company is an Australian resident for income tax purposes and is the head company of a consolidated group. The Company is not an employer entity, but some subsidiary members of the consolidated group are. The Company derives assessable income from its business activities. The Company operates an employee share scheme as part of its remuneration and reward program for the group's employees (the Plan). The Plan is governed by the Plan Rules. Under the Plan, participants are granted option rights to acquire shares in the Company for no consideration. The options are subject to vesting conditions until the relevant vesting date. Upon vesting, the participants may exercise their options and receive the relevant number of shares in the Company. The Company will make cash contributions to the Trust from time to time to fund the acquisition of shares in the Company, after options are granted to participants. These contributions are irretrievable and non-refundable because the Company and its subsidiaries are not beneficiaries of the Trust and are not entitled to any part of the Trust fund (including shares held by the Trust). The cash contributions form part of the corpus of the Trust.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 177F | 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 section 130-85 | Fringe Benefits Tax Assessment Act 1986 subsection 136(1)