Employee Share Schemes

ESS includes:

  • shares
  • stapled securities (provided at least one of the stapled interests is a share in a company)
  • rights to acquire shares and stapled securities.

Your company got interest in regards to your employment and showed as ESS interest gain by You.

The discount of the market value of the ESS interests are different as well as the amount paid to gain them also totally different.

The ESS interests can:

  • be from an Australian company or a foreign company
  • relate to your employment inside or outside Australia
  • relate to a work relationship other than employment, for example sub-contracting.

The discount is considered as a taxed so you need to showed in your return which you acquired the interest. These schemes are also called as ‘taxed-upfront schemes’. On the other hand, if you and the scheme meet certain criteria regarding tax is deferred until a later time. These deferred schemes also called ‘deferral schemes’.

Changes to ESS (Employee Share Schemes) interests acquired on or after 1 July 2015 include:

  • changes to the 'deferred taxing point'
  • a tax concession through which some discounts on ESS interests in start-up companies will not be taxed under the employee share scheme regime, as long as the eligibility criteria are met. Subsequent gains on the disposal of these ESS interests will be taxed under the capital gains tax rules.

Discounts on eligible ESS (Employee Share Schemes) interests provided to you by a start-up company will not be included on your Employee share scheme statement and should not be included at this section.

For more information on online tax return 2020, Tax Return 2020, myGov 2020, myTax 2020 or any other tax related matter, please call our professional accountant on 1300 768 284 or you can email us at enquiry@taxrefundonspot.com.au

Share Buy Backs – Tax Refund On Spot

As a shareholder, you may get an offer from a company to purchase back some or all of your shares in the company. If you disposed of shares back to the company under a share buy-back agreement, you may have made a capital gain or capital loss from that capital gains tax (CGT) event.

To work out whether you have complete a capital gain or capital loss, you compare the capital earnings with your cost base and reduced cost base. When you make the capital gain or capital loss will depend on the circumstances of the particular buy-back offer. If shares in a company:

  • are not bought back by the company in the ordinary course of business of a stock exchange – for example, the company writes to shareholders offering to buy their shares (commonly referred to as ‘off-market share buy-back’),
  • the buy-back price is less than what the market value of the share would have been if the buy-back hadn’t occurred and was never proposed

Then the capital profits are taken to be the market value the share would have been (if the buy-back hadn’t occurred and was never proposed) minus the amount of any dividend paid under the buy-back. In this situation, the company may provide you with that market value or, if the company obtained a class ruling from us, you can find out the amount from the class ruling by search the legal file external link

Under other off-market buy-backs, where a extra is paid as part of the buy-back, the amount paid excluding the bonus is your capital proceeds for the share

For more information on Etax, myTax ATO and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au