Summer 2014/15

Employee Share Plans

The Government has recently announced that it would be reforming the taxation treatment of Employee Share Plans (ESP’s) in an attempt to encourage entrepreneurship in Australia and support innovative start up companies.

Some of the proposed changes to ESP’s include:

• Employees may opt to be taxed on ‘discounted’ options when exercised, rather than up front.
• Employees of Eligible Start-Up Companies will not be subject to upfront taxation on ‘small discounted’ options or shares held for at least 3 years.
• Extend maximum deferral time on ‘discounted’ options and shares for employees of Eligible Start-Up Companies to 15 years.

Removal of Tax Concessions

Following the repeal of the Mining Tax on 5 September 2014, a number of important tax concessions have been removed, such as:

• Superannuation guarantee increase from 9.5% to 12% from 1 July 2019. Instead, the rate is fixed at 9.5% until 1 July 2021.
• Ability for companies to offset losses against tax paid in previous years to get a refund.
• Outright deduction for capital assets to the value of $6,500.