What is an ordinary share for ESS/ESOP purposes? Introduction The general tax rules relating to the taxation of an employee share scheme (ESS), or an employee share option plan (ESOP) are outlined in Division 83A of the Income Tax Assessment Act 1997 (General ESS Tax Rules). The General ESS Tax Rules are aimed at [...]
What is a premium priced option plan and when are they useful? Introduction A premium priced option plan (PPOP) is not a legislative term, rather, it is a term used to describe an employee share option plan where the exercise price of the options is sufficiently above the market value of the underlying shares [...]
Founder option plans Introduction How many times have you heard horror stories of non-contributing or under-contributing founders (Non-Performing Founder) retaining a large equity stake in the company? Equally common are the stories of ‘simple’ fixes in the form of agreements to either: transfer the Non-Performing Founder’s shares (or a portion of them) at a [...]
ESS/ESOPs and the general 50% CGT discount Introduction The general tax rules relating to the taxation of an employee share scheme (ESS), or an employee share option plan (ESOP) are outlined in Division 83A of the Income Tax Assessment Act 1997 (General ESS Tax Rules). The General ESS Tax Rules are aimed at taxing [...]
Can a foreign company issue shares or options under the Australian ‘start-up’ ESS/ESOP rules? Introduction Traditionally, only the largest corporate groups operated across multiple jurisdictions. However, the combined impact of: globalisation; and the digitalisation of the global economy, has resulted in start-ups and small to medium enterprises (SMEs) operating in around the world. The [...]
