ESS interests acquired from 1 July 2015
For ESS interests acquired from 1 July 2015, a refund is available if:
- the conditions of the scheme did not directly protect you (the employee) from a fall in the market value of the interest (market risk)
- the forfeiture or loss was not the result of a choice you made, except where the choice was either
- to cease employment
- not to exercise the right before it lapsed or to allow the right to be cancelled if the ESS interest is a right.
If you receive valuable consideration for no longer holding the interest, we may not consider your ESS interests forfeited or lost. The consideration you receive may be taxable as the disposal of your ESS interests can be the deferred taxing point.
If you are entitled to exclude the discount, you are treated as never having acquired your ESS interests. You may request an amendment of your assessment to exclude the discount previously included in your assessable income. There is no time limit for amending an assessment to exclude an amount from assessable income for an ESS interest which is forfeited or lost.
Where a refund is not available, you may be able to claim a capital loss under the capital gains tax provisions.
ESS interests acquired between 1 July 2009 and 30 June 2015
For ESS interests acquired between 1 July 2009 and 30 June 2015, a refund is available only if:
- the conditions of the scheme did not directly protect you (the employee) from a fall in the market value of the interest (market risk)
- you had no choice but to forfeit or lose the ESS interests (except when the choice was to cease employment).
If you receive valuable consideration for no longer holding the interest, we may not consider your ESS interests forfeited or lost. The consideration you receive may be taxable as the disposal of your ESS interests can be the deferred taxing point.
You may request an amendment of your assessment to exclude the discount previously included in your assessable income. There is no time limit for amending an assessment to exclude an amount from assessable income for an ESS interest which is forfeited or lost.
Where a refund is not available, you may be able to claim a capital loss under the capital gains tax provisions.
ESS interests acquired by an associate
If an associate acquires ESS interests, which are provided in relation to your employment or services, the ESS rules require you (rather than your associate) to include the discount in your assessable income. Associates can include a spouse, child, company or trustee of a trust (other than the trustee of an employee share trust).
If you have included a discount in your assessable income for the ESS interests and the ESS interests are subsequently forfeited or lost, you will be entitled to exclude the discount from your assessable income (rather than the assessable income of your associate), provided the conditions for obtaining a refund are met.