In today's tight labour market we continue to see interest
from employer clients in establishing employee share schemes in
order to retain, attract and incentivise talent.
Perhaps the most straightforward of the schemes to create,
administer and explain to staff is one relying upon the
"eligible start up concessions" in the Tax Act. It also
provides the most favourable tax result for the employees as there
are no income tax consequences for them and enables them to acquire
the shares on capital account. Therefore, the employee will be in a
positon to rely upon the 50% CGT concession when the shares are
ultimately disposed of.
In terms of the type of equity which can be offered and the
extent of it, they have to be ordinary shares and no more than 10%
of the company's capital can be made available to employees
using the eligible start up concessions.
