Employee Share Schemes - Submission To Treasury

The Government proposes to modify the Budget measure as announced to:

• introduce a limited deferral of the taxing point for schemes where there is a 'genuine risk of forfeiture', to protect employees who have a real risk of being taxed on a share or right that they might never get full title to;

• modify the taxing point ('deferred taxing point') for shares, stapled securities and rights;

• introduce an annual reporting requirement and associated withholding arrangements;

• review the existing valuation rules;

• modify the rules relating to the refund of income tax for forfeited benefits.

The Government proposes that these new arrangements will apply to shares or rights acquired on or after 1 July 2009. The existing law apply to all shares and rights acquired before 1 July.