The Assistant Treasurer, Senator Rod Kemp, today announced that the Government will be introducing amendments relating to the capital gains tax (CGT) treatment of certain shares or rights acquired under employee share plans that are covered by Division 13A of the Income Tax Assessment Act 1936.
The amendments will affect situations where the employee share plan has a trust structure and the particular employee has chosen to be taxed under Division 13A in the income year in which the shares or rights were acquired.
The amendments will ensure that the CGT acquisition cost for the employee is the market value of the share or right at the time it is acquired by the employee for Division 13A purposes. The amendments will ensure that the CGT provisions apply in effect from when the trustee acquired the shares or rights. As a consequence, the amendments will also ensure that the 12-month minimum qualifying period for the 50 per cent CGT discount begins from when the employee acquires the shares or rights for Division 13A purposes.
These amendments will apply to relevant shares and rights acquired for the purposes of Division 13A by employees under an employee share plan after 5pm eastern summer time today. Integrity measures will be introduced to safeguard the policy intent of this commencement date and will apply to arrangements in which trustees already holding employee shares or rights change the conditions relating to those shares or rights (including the length of time for which they are held in the trust).
CANBERRA
27 February 2001
Media contacts: Richard Allsop Assistant Treasurer’s Office (02) 6277 7360
John Burge Australian Taxation Office (02) 6216 1177