Employee Share/Option Scheme Tax Rules to Apply from 1 July 2015

    View Authors October 2014

    On 14 October 2014, the Australian government introduced significant changes to the employee share scheme rules to apply to shares or options provided from July 2015. The existing tax rules introduced in 2009 by the former Labor government have been harshly criticised as inhibiting the ability to attract and retain employees by offering ownership interests in a company. The 2009 rules taxed employees either when shares or options were granted, or when the shares or options “vested”. This meant that employees were often taxed at a time when they were not able to sell the shares in order to pay the tax.

    The government has announced significant concessions for employees of start-up companies, as well as some other changes to the rules to assist employees of all companies.