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AngeleneC(Initiate)Initiate
12 July 2021

HI

If an employee is made redundant on 30 June 21, it is assumed that the deferred taxing point of their unvested shares from ESS is taxable at the market value of their termination date. Is the deferred taxing point moved if the employee shares their sale on 6 July 21 for example, due to the 30 day rule?

If so, does the taxable discount value (Assuming 0 cost base) for FY 2021 for ESS is 0, and the value in which the shares were sold is taxable in FY 22?

OR, beccause they have been terminated, the deferred taxing point is their termination date, as at 30 June 2021.

Thank you

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1,200 views
2 replies

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Most helpful replyATO Certified Response

JasonT(Community Support)Community Support
ATO Certified Response13 July 2021

Hi @AngeleneC ,

ESS interests acquired from 1 July 2015

The deferred taxing point is the earliest of:

    • when there's no real risk of forfeiting the shares, and the scheme no longer genuinely restricts disposal
    • when you cease employment with the employer through which you acquired the shares, or
    • 15 years after the shares were acquired

    ESS interests acquired between 1 July 2009 to 30 June 2015

    The deferred taxing point is the earliest of:

      • seven years after the employee acquired the share
      • when you cease employment with the employer through which you acquired the shares, or
      • when there's no real risk of forfeiting the shares, and the scheme no longer genuinely restricts disposal

      Disposing within 30 days of the deferred taxing point will make the deferred taxing point the date of disposal. In the example you provided the deferred taxing point would fall in to the 2022 FY.

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      Most helpful replyATO Certified Response

      JasonT(Community Support)Community Support
      ATO Certified Response13 July 2021

      Hi @AngeleneC ,

      ESS interests acquired from 1 July 2015

      The deferred taxing point is the earliest of:

        • when there's no real risk of forfeiting the shares, and the scheme no longer genuinely restricts disposal
        • when you cease employment with the employer through which you acquired the shares, or
        • 15 years after the shares were acquired

        ESS interests acquired between 1 July 2009 to 30 June 2015

        The deferred taxing point is the earliest of:

          • seven years after the employee acquired the share
          • when you cease employment with the employer through which you acquired the shares, or
          • when there's no real risk of forfeiting the shares, and the scheme no longer genuinely restricts disposal

          Disposing within 30 days of the deferred taxing point will make the deferred taxing point the date of disposal. In the example you provided the deferred taxing point would fall in to the 2022 FY.

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