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TAXATION LAWS AMENDMENT ACT (NO. 3) 2003 NO. 101, 2003 - SCHEDULE 2

- Employee share schemes

Part 1— Income Tax Assessment Act 1997
1 At the end of subsection 104-75(6)

Add:

Note: There is also an exception for employee share trusts: see section 130-90.

2 Section 109-55 (table item 12)

Repeal the table item.

3 Section 109-55 (before table item 13)

Insert:

12


You acquire a share or right under an employee share scheme from an employee share trust


at the time you first acquired a beneficial interest in the share or right


section 115-30


4 Section 112-75

After "130-80", insert "130-83".

5 Subsection 115-30(1) (at the end of the table)

Add:

8


A * CGT asset that is a * share or right where:

(a) the share or right was * acquired under an * employee share scheme; and
(b) the share or right was acquired from an * employee share trust; and
(c) if the share is a * qualifying share or the right is a * qualifying right—the acquirer made an election under section 139E of the Income Tax Assessment Act 1936


When the acquirer first acquired a beneficial interest in the share or right


6 At the end of section 130-80

Add:

(3)
However, if:

(a)
the * share or right was * acquired from an * employee share trust; and
(b)
if the share is a * qualifying share or the right is a * qualifying right—the acquirer made an election under section 139E of the Income Tax Assessment Act 1936 ;

the first element of the * cost base and * reduced cost base of the share or right is its market value (worked out under sections 139FA to 139FF of the Income Tax Assessment Act 1936 ) when you first acquired a beneficial interest in the share or right.

Note: Section 130-80 of the Income Tax (Transitional Provisions) Act 1997 may affect the cost base or reduced cost base for shares or rights held by a trust at 5 pm (by legal time in the Australian Capital Territory) on 27 February 2001.

7 Subsection 130-83(2)

After "A1,", insert "C2,"

8 Subsection 130-83(2)

Omit "disposal", substitute "event".

9 At the end of section 130-85

Add:

(3)
However, if:

(a)
the * share or right was * acquired from an employee share trust; and
(b)
if the share is a * qualifying share or the right is a * qualifying right—the acquirer made an election under section 139E of the Income Tax Assessment Act 1936 ;

the first element of the * cost base and * reduced cost base of the share or right is its market value (worked out under sections 139FA to 139FF of the Income Tax Assessment Act 1936 ) when you first acquired a beneficial interest in the share or right.

Note: Section 130-80 of the Income Tax (Transitional Provisions) Act 1997 may affect the cost base or reduced cost base for shares or rights held by a trust at 5 pm (by legal time in the Australian Capital Territory) on 27 February 2001.

10 Subsection 130-90(1)

Omit "a trustee makes when a beneficiary", substitute "a trustee or a beneficiary makes when the beneficiary".

11 Subsection 995-1(1)

Insert:

"employee share trust "means a trust of the kind mentioned in subsection 139C(5) of the Income Tax Assessment Act 1936 .

12 Application

(1) The amendments made by items 1, 2, 4, 7, 8, 10 and 11 apply to assessments for the 1998-99 income year and later income years.
(2) The amendments made by items 3 and 5 apply to shares or rights where the beneficial interest in the share or right was acquired after 5 pm (by legal time in the Australian Capital Territory) on 27 February 2001.
(3) The amendments made by items 6 and 9 apply to shares or rights acquired (within the meaning of Division 13A of Part III of the Income Tax Assessment Act 1936 ) by you after 5 pm (by legal time in the Australian Capital Territory) on 27 February 2001. Those amendments also apply to shares or rights acquired by you at or before that time if you choose that the amendments apply.

Part 2— Income Tax (Transitional Provisions) Act 1997
13 After Subdivision 130-C

Insert:

Subdivision 130-DA—Employee share schemes

130-80 Extension of trust holding period

(1)
This section applies if:

(a)
a share or right is held by an employee share trust at 5 pm (by legal time in the Australian Capital Territory) on 27 February 2001; and
(b)
at the time that the share or right was acquired by the employee share trust it was possible to determine that the share or right would be acquired from the trust by another entity at a particular time or on the occurrence of a particular event; and
(c)
the share or right is acquired by that other entity after that time or the occurrence of that event.
(2)
If this section applies, the first element of the cost base and reduced cost base of the share or right is its market value (worked out under sections 139FA to 139FF of the Income Tax Assessment Act 1936 ) at the particular time, or on the occurrence of the particular event, referred to in paragraph (1)(b).

14 Subsection 130-95(1)

Omit "Subdivision 130-D of the Income Tax Assessment Act 1997 ", substitute "This Subdivision".

Note: The heading to section 130-95 is altered by omitting "Division" and substituting "Subdivision".

15 Subsection 130-95(2)

Omit "Subdivision 130-D of the Income Tax Assessment Act 1997 ", substitute "this Subdivision".

16 Application

The amendments made by items 14 and 15 apply to assessments for the 1998-99 income year and later income years.

Part 3— Fringe Benefits Tax Assessment Act 1986
17 Subsection 136(1) (paragraph (hb) of the definition of fringe benefit )

After "employees", insert ", or associates of employees,".

18 Application

The amendment made by this Part applies in respect of the FBT year beginning on 1 April 1995 and in respect of all later FBT years.


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