Private ruling: Employee Share Acquisition Scheme (ESAS)
Published: February 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 13 May 2011

Ruling: Q1: Do you need to include your assessable discount at the deferred taxing point on shares issued to you under an ESAS some time after 20 September 1985 in your 2010/11 income tax return? | A1: No.

Relevant facts and circumstances: You acquired partly paid shares under an ESAS some time after 20 September 1985 at less than market value. You elected to have the discount calculated and included in your assessable income at the time of issue. The shares had selling restrictions and were held in trust until they were fully paid. You paid the final call and had the shares transferred to you.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 83A -115. | Income Tax Assessment Act 1936 Section 26AAC.

Reasons for decision: Summary: The employee share acquisition scheme (ESAS) provisions applicable to your shares are contained in section 26AAC of the Income Tax Assessment Act 1936 (ITAA 1936). You do not need to include the assessable discount due to paying the final call (and the selling restrictions being lifted) on your shares in your assessable income as the ESAS provisions have already been applied to them at the time they were issued to you. [subsection 26AAC(5) of the ITAA 1936] As you made an election under subsection 26AAC(15A) of the ITAA 1936 the discount is calculated and assessable only at the time the shares were issued. As you included the discount amount in your income tax return for the year the share were issued you do not need to include the assessable discount at the deferred taxing point in your 2010/11 income tax return.

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