Private ruling: Employee Share Plan
Date of advice: 10 October 2017
Published: March 2018
Ruling period: 1 July 20xx – 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Will the irretrievable cash contributions by the Company to (the Trustee to fund the acquisition of, or subscription for, shares in the Company by the Trust be assessable income of the Trust under sections 6-5 or 6 -10 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. | Q2: Will a capital gain or capital loss that arises for the Trustee at the time when either CGT Event E5 or E7 happens in relation to the Company be disregarded under section 130-90 of the ITAA 1997 if the employee acquire the shares for the same or less than the cost base of the shares in the hands of the Trustee? | A2: Yes.

Relevant facts and circumstances: 1. The Company is listed on the Australian Securities Exchange (ASX). It is head entity of a Tax Consolidated Group. 2. The Company has established a remuneration strategy that supports and drives the achievement of the Company business strategy. As such, it has various incentive plans which provide its employees with the opportunity to participate in equity ownership. The incentive programs are the LTI Plan, the $1000 Plan and the Salary Sacrifice Plan, collectively referred to as the Plans. 3. Under the Plans, eligible employees (Participants) are granted Rights, and the opportunity to receive or acquire the Company shares subject to certain conditions as specified in the Plan rules. 4. The Plans operates as follows: ● The Company established A Trust to facilitate the acquisition, holding of, and allocation of shares to Participants. ● The Company makes irretrievable cash contributions to the Trustee to enable the Trustee to acquire the Company shares to satisfy the Rights, Options or Shares. ● The Rights are offered by the Company to Participants. When the Rights vest to a Participant, shares are released by the Trustee and allocated to the Participants. ● Once Rights vest and shares are transferred to the Participants, the Participants are entitled to dispose of their shares (subject to complying with the Company’s policy) according to their own wishes. 5. The Company is not a beneficiary of the Trust and it has no interest in the shares held by the Trustee.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 6-10 | Income Tax Assessment Act 1997 Section 130-90

Reasons for decision: Summary: The irretrievable cash contributions to the trustee represent accretions to the corpus of the Trust. The contributions constitute capital receipts to the Trustee, and are not included in the assessable income of the Trust. All of the requirements in section 130-90 have been satisfied. Therefore a capital gain or capital loss that arises for the Trust at the time when a share is allocated by the Trustee to a Trust Participant pursuant to the Plan Rules in satisfaction of a Performance Right will be disregarded.

Reasons for decision: All legislative references are to the ITAA 1997 unless stated otherwise.