Taxation of employee share and option plans - round three

The Assistant Treasurer announced on Wednesday afternoon further changes to the proposed new regime for taxing employee shares and options. This is the Government’s third announcement on the subject, and it has in large part now reverted back to the pre-budget tax arrangements, although with some very important qualifications. Sale restrictions are to be reinstated as a deferral mechanism – but with important limitations. The Government has also elaborated on what will constitute real risk of forfeiture. Rights and options will generally remain taxable when they vest, rather than later upon exercise. The start date remains 1 July 2009.  For our full Tax Brief - click here