Income Tax Assessment Act 1997
View history note
Hide history notePart 3-3 inserted by No 46 of 1998.
Div 130 inserted by No 46 of 1998.
Subdiv 130-D substituted by No 133 of 2009, s 3 and Sch 1 item 40, applicable in relation to the ESS interests mentioned in subsections 83A-5(1) and (2) of the Income Tax (Transitional Provisions) Act 1997 . Subdiv 130-D formerly read:
Subdivision 130-D - Employee share schemes
SECTION 130-80 Share or right acquired under employee share scheme
130-80(1)
This section sets out what happens if you:
(a) *acquire a *share or right at a discount (within the meaning of Subdivision C of Division 13A of Part III of the Income Tax Assessment Act 1936 ) under an *employee share scheme; or
(b) acquire a share or right that, because of section 139DQ of that Act, is treated, for the purposes of Division 13A of Part III of that Act, as if it were a continuation of a share or right acquired under an employee share scheme.Note:
The fact that you made an election under section 139E of the Income Tax Assessment Act 1936 does not prevent a share or right from being treated as a continuation of a share or right acquired under an employee share scheme.
HistoryS 130-80(1) amended by No 147 of 2005, s 3 and Sch 5 item 14, by inserting the note at the end, applicable, and taken to have applied, to acquisitions of shares or rights on or after 1 July 2004.
In this item:
acquisition , of a share or right has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .
S 130-80(1) substituted by No 41 of 2005, s 3 and Sch 3 item 17, effective 1 April 2005. Act No 41 of 2005, s 3 and Sch 3 item 22 contains the following application provision:
Application
(1) The amendments made by this Schedule apply, and are taken to have applied, to acquisitions of shares or rights on or after 1 July 2004.
(2) In this item:
acquisition
, of a share or right, has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .S 130-80(1) formerly read:
130-80(1)
This section sets out what happens if you *acquire a *share or right at a discount (within the meaning of Subdivision C of Division 13A of Part III of the Income Tax Assessment Act 1936 ) under an *employee share scheme.
130-80(2)
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 *acquired it.
130-80(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.
HistoryS 130-80(3) inserted by No 101 of 2003, s 3 and Sch 2 item 6. Act No 101 of 2003, s 3 and Sch 2 item 12 (as amended by No 147 of 2005, s 3 and Sch 5 item 19), contains the following application provisions:
(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.
(4)
A share or right that, under section 139DQ of the Income Tax Assessment Act 1936 , is treated as if it were a continuation of another share or right for the purposes of Division 13A of Part III of that Act:
(a) is treated in the same way for the purposes of subitem (3) of this item; and
(b) is taken, for the purposes of that subitem, to have been acquired at the time of the last acquisition of the share or right that was not treated as such a continuation for the purposes of that Division.
130-80(4)
This section does not apply to a *share or right if:
(a) you become an Australian resident; and
(aa) you are not a * temporary resident immediately after you become an Australian resident; and
(b) you owned, or held a beneficial interest in, the share or right just before you became an Australian resident; and
(c) the share or right is not *taxable Australian property; and
(d) either:
(i) the share or right is not a *qualifying share or a *qualifying right; or
(ii) you have made an election under section 139E of the Income Tax Assessment Act 1936 covering the share or right.Note 1:
Sections 768-955 and 855-45 deal with shares or rights that are not taxable Australian property.
Note 2:
Paragraph (aa) - see also section 768-920 .
HistoryS 130-80(4) amended by No 97 of 2008 , s 3 and Sch 3 item 112, by substituting " Note 1: " for " Note: " , effective 3 October 2008.
S 130-80(4) amended by No 168 of 2006 , s 3 and Sch 4 items 74 and 75, by substituting " is not *taxable Australian property " for " does not have the *necessary connection with Australia " in para (c) and substituting note 1, applicable to CGT events that happen on or after 12 December 2006. Note 1 formerly read:
Note 1: Sections 136-40 and 768-955 deal with shares or rights that do not have the necessary connection with Australia.
S 130-80(4) amended by No 32 of 2006, s 3 and Sch 1 items 27 to 29, by substituting " Note 1 " for " Note " in the note, substituting " Sections 136-40 and 768-955 deal " for " Section 136-40 deals " in the note and inserting note 2, effective 6 April 2006.
S 130-80(4) amended by No 32 of 2006, s 3 and Sch 1 item 26, by inserting para (aa), applicable to an individual becoming an Australian resident on or after 1 July 2006.
S 130-80(4) inserted by No 64 of 2005.
S 130-80 inserted by No 46 of 1998.
SECTION 130-83 Qualifying shares and qualifying rights
130-83(1)
There is an exception if:
(a) the *share is a *qualifying share or the right is a *qualifying right; and
(b) you do not make an election under section 139E of the Income Tax Assessment Act 1936 covering the share or right.Note:
If you do not make an election of this kind, the amount is included in your assessable income for the income year in which the cessation time occurs: for example, when restrictions on disposing of the share cease.
HistoryS 130-83(1) amended by No 64 of 2005.
130-83(1A)
If:
(a) a *CGT event happens in relation to the *share or right (the original share or right ); and
(b) it happens in connection with an acquisition (within the meaning of Subdivision C of Division 13A of Part III of the Income Tax Assessment Act 1936 ) of another share or right (the matching share or right ); and
(c) under section 139DQ of the Income Tax Assessment Act 1936 the matching share or right is treated, for the purposes of Division 13A of Part III of that Act, as if it were a continuation of the original share or right;any *capital gain or *capital loss you make from the CGT event is disregarded.
HistoryS 130-83(1A) inserted by No 41 of 2005, s 3 and Sch 3 item 18, effective 1 April 2005. Act No 41 of 2005, s 3 and Sch 3 item 22 contains the following application provision:
Application
(1) The amendments made by this Schedule apply, and are taken to have applied, to acquisitions of shares or rights on or after 1 July 2004.
(2) In this item:
acquisition
, of a share or right, has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .
130-83(2)
If *CGT event A1, C2, E1, E2, E5 or I1 happens in relation to the *share or right (or any *share you *acquired by exercising the right) in an arm ' s length transaction at the *cessation time, or within 30 days after that time, any *capital gain or *capital loss you make from the event is disregarded.Note:
The full list of CGT events is in section 104-5 .
HistoryS 130-83(2) amended by No 64 of 2005 and No 101 of 2003.
130-83(3)
If that event does not happen in relation to the *share or right (or any *share you *acquired by exercising the right) in an arm ' s length transaction at the *cessation time, or within 30 days after that time, 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 that time.HistoryS 130-83(3) substituted by No 173 of 2000.
130-83(4)
Subsection (3) does not apply to a *share or right if:
(a) you become an Australian resident; and
(aa) you are not a * temporary resident immediately after you become an Australian resident; and
(b) you owned, or held a beneficial interest in, the share or right just before you became an Australian resident; and
(c) the share or right is not *taxable Australian property; and
(d) the cessation time for the share or right had occurred before you became an Australian resident.Note:
Sections 768-955 and 855-45 deal with shares or rights that are not taxable Australian property.
HistoryS 130-83(4) amended by No 97 of 2008 , s 3 and Sch 3 item 113, by substituting " Note " for " Note 1 " , effective 3 October 2008.
S 130-83(4) amended by No 168 of 2006 , s 3 and Sch 4 items 76 and 77, by substituting " is not *taxable Australian property " for para (c) and substituting note 1, applicable to CGT events that happen on or after 12 December 2006. Note 1 formerly read:
Note 1: Sections 136-40 and 768-955 deal with shares or rights that do not have the necessary connection with Australia.
S 130-83(4) amended by No 32 of 2006, s 3 and Sch 1 items 31 and 32, by substituting " Note 1 " for " Note " in the note and substituting " Sections 136-40 and 768-955 deal " for " Section 136-40 deals " in the note, effective 6 April 2006.
S 130-83(4) amended by No 32 of 2006, s 3 and Sch 1 item 30, by inserting para (aa), applicable to an individual becoming an Australian resident on or after 1 July 2006.
S 130-83(4) inserted by No 64 of 2005.
S 130-83 inserted by No 46 of 1998.
SECTION 130-85 Share or right acquired under employee share scheme involving your associate
130-85(1)
This section sets out the modification to the rules about *cost base and *reduced cost base that happens if:
(a) you *acquire a *share or right at a discount (within the meaning of Subdivision C of Division 13A of Part III of the Income Tax Assessment Act 1936 ) under an *employee share scheme; and
(b) an amount is included, under section 139D of the Income Tax Assessment Act 1936 , in:
(i) your *associate ' s assessable income; or
(ii) the assessable income of a company (an affiliate company ) where you own an indirect interest in a *share in the company or in a right to acquire a share in it through one or more interposed companies, partnerships or trusts.
130-85(2)
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 *acquired it.
130-85(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.
HistoryS 130-85(3) inserted by No 101 of 2003, s 3 and Sch 2 item 9. For application provisions see note under s 130-80(3) .
130-85(4)
This section does not apply to a *share or right if:
(a) you become an Australian resident; and
(aa) you are not a * temporary resident immediately after you become an Australian resident; and
(b) you owned, or held a beneficial interest in, the share or right just before you became an Australian resident; and
(c) the share or right is not *taxable Australian property.Note 1:
Sections 768-955 and 855-45 deal with shares or rights that are not taxable Australian property.
Note 2:
Paragraph (aa) - see also section 768-920 .
HistoryS 130-85(4) amended by No 168 of 2006 , s 3 and Sch 4 items 78 and 79, by substituting " is not *taxable Australian property " for " does not have the *necessary connection with Australia " in para (c) and substituting note 1, applicable to CGT events that happen on or after 12 December 2006. Note 1 formerly read:
Note 1: Sections 136-40 and 768-955 deal with shares or rights that do not have the necessary connection with Australia.
S 130-85(4) amended by No 32 of 2006, s 3 and Sch 1 items 34 to 36, by substituting " Note 1 " for " Note " in the note, substituting " Sections 136-40 and 768-955 deal " for " Section 136-40 deals " in the note and inserting note 2, effective 6 April 2006.
S 130-85(4) amended by No 32 of 2006, s 3 and Sch 1 item 33, by inserting para (aa), applicable to an individual becoming an Australian resident on or after 1 July 2006.
S 130-85(4) inserted by No 64 of 2005.
S 130-85 inserted by No 46 of 1998.
SECTION 130-90 Share or right acquired under an employee share trust - beneficiary absolutely entitled
130-90(1)
A *capital gain or a *capital loss a trustee or a beneficiary makes when the beneficiary becomes absolutely entitled to a *share or right in a company is disregarded if these conditions are satisfied.HistoryS 130-90(1) amended by No 101 of 2003.
130-90(1A)
The beneficiary must be:
(a) an individual who receives (or is entitled to receive) *withholding payments covered by subsection (5) from the company or from another company (at the time the beneficiary first became beneficially entitled to the *share or right); or
(b) an *associate or affiliate company of such an individual; or
(c) an individual who is engaged in foreign service (within the meaning of section 139GBA of the Income Tax Assessment Act 1936 ), or an *associate or affiliate company of such an individual.HistoryS 130-90(1A) amended by No 64 of 2005 and No 179 of 1999.
130-90(2)
The terms of the trust must have required or authorised the trustee to transfer the *share or right to the individual, *associate or affiliate company.HistoryS 130-90(2) amended by No 179 of 1999.
130-90(3)
One of the following paragraphs must apply:
(a) the individual, *associate or affiliate company must have acquired the *share or right:
(i) in any case - under an *employee share scheme; or
(ii) in the case of a share - as a result of exercising a right acquired under an employee share scheme; or
(iii) in the case of a share - in satisfaction of a beneficial interest that was the result of exercising a right acquired under an employee share scheme;
(b) the share or right must, because of section 139DQ of the Income Tax Assessment Act 1936 , be a share or right that is treated, for the purposes of Division 13A of Part III of that Act, as if it were a continuation of a share or right acquired under an employee share scheme;
(c) if the share was acquired as a result of exercising a right, or in satisfaction of a beneficial interest that was the result of exercising a right - the right must, because of section 139DQ of the Income Tax Assessment Act 1936 , be a right that is treated, for the purposes of Division 13A of Part III of that Act, as if it were a continuation of a right acquired under an employee share scheme.HistoryS 130-90(3) amended by No 88 of 2009, s 3 and Sch 5 items 327 and 328, by substituting para (a)(i), (ii) and (iii) for para (a)(i) and (ii) and inserting " or in satisfaction of a beneficial interest that was the result of exercising a right - " after " exercising a right, " in para (c), effective 18 September 2009. Para (a)(i) and (ii) formerly read:
(i) under an *employee share scheme; or
(ii) alternatively in the case of a share - as a result of exercising a right acquired under an employee share scheme;S 130-90(3) substituted by No 59 of 2008, s 3 and Sch 1 item 14. Act No 14 of 2009 , s 3 and Sch 4 item 51, effective 26 March 2009, amends the application of this amendment to read:
15 Application
(1)
Subject to subitem (2), the amendment made by item 14 applies in relation to CGT events happening after 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 2008 (the Budget time ).
(2)
An entity may choose that the amendment made by item 14 applies to a CGT event that happened:
(a) after the start of the entity ' s 1998-99 income year; and
(b) before the Budget time.
S 130-90(3) formerly read:
130-90(3)
Either:
(a) the individual, *associate or affiliate company must have acquired the *share or right under an *employee share scheme; or
(b) the share or right must, because of section 139DQ of the Income Tax Assessment Act 1936 , be a share or right that is treated, for the purposes of Division 13A of Part III of that Act, as if it were a continuation of a share or right acquired under an employee share scheme.S 130-90(3) substituted by No 41 of 2005, s 3 and Sch 3 item 20, effective 1 April 2005. Act No 41 of 2005, s 3 and Sch 3 item 22 contains the following application provision:
Application
(1) The amendments made by this Schedule apply, and are taken to have applied, to acquisitions of shares or rights on or after 1 July 2004.
(2) In this item:
acquisition
, of a share or right, has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .S 130-90(3) formerly read:
130-90(3)
The individual, *associate or affiliate company must have acquired the *share or right under an *employee share scheme.S 130-90(3) amended by No 179 of 1999.
130-90(4)
The *individual, *associate or affiliate company must not have *acquired the *share or right for more than the *cost base of the share or right (in the hands of the trustee) at the time of the transfer.Note:
There are transitional rules for some shares or rights acquired under employee share schemes: see Subdivision 130-D of the Income Tax (Transitional Provisions) Act 1997 .
HistoryS 130-90(4) amended by No 179 of 1999.
130-90(5)
This subsection covers a *withholding payment covered by any of the provisions in Schedule 1 to the Taxation Administration Act 1953 listed in the table.
Withholding payments covered Item Provision Subject matter 1 Section 12-35 Payment to employee 2 Section 12-40 Payment to company director 3 Section 12-45 Payment to office holder 3A Section 12-47 Payment to *religious practitioner 4 Section 12-50 Return to work payment 5 Subdivision 12-D Benefit, training and compensation payments HistoryS 130-90(5) amended by No 168 of 2001 and inserted by No 179 of 1999.
Stapled securities
130-90(6)
This section applies, in the same way as it applies in relation to a *share or right in a company, in relation to a *CGT asset that:
(a) forms part of a stapled security (within the meaning of Division 13A of Part III of the Income Tax Assessment Act 1936 ); or
(b) is a right to *acquire a stapled security (within the meaning of that Division).HistoryS 130-90(6) inserted by No 56 of 2007 , s 3 and Sch 3 item 20, effective 12 April 2007. No 56 of 2007 , s 3 and Sch 3 item 39 contains the following application provision:
(1)
The amendment applies to acquisitions of stapled securities, and of rights to acquire stapled securities, on or after 1 July 2006.
(2)
In this item:acquisition
has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .
130-90(7)
For the purposes of that application, a *withholding payment from a stapled entity (within the meaning of Division 13A of Part III of the Income Tax Assessment Act 1936 ) for the stapled security is taken to be a withholding payment from the company.HistoryS 130-90(7) inserted by No 56 of 2007 , s 3 and Sch 3 item 20, effective 12 April 2007. No 56 of 2007 , s 3 and Sch 3 item 39 contains the following application provision:
(1)
The amendment applies to acquisitions of stapled securities, and of rights to acquire stapled securities, on or after 1 July 2006.
(2)
In this item:acquisition
has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .
S 130-90 inserted by No 46 of 1998.
SECTION 130-95 SECTION 130-95 Share or right acquired under an employee share trust - 100% takeover or restructure
130-95
If:
(a) a *CGT event happens in relation to a *share or right (the original share or right ); and
(b) it happens in connection with an acquisition (within the meaning of Subdivision C of Division 13A of Part III of the Income Tax Assessment Act 1936 ) of another share or right (the matching share or right ) by the beneficiary of an *employee share trust; and
(c) under section 139DQ of the Income Tax Assessment Act 1936 the matching share or right is treated, for the purposes of Division 13A of Part III of that Act, as if it were a continuation of the original share or right;any *capital gain or *capital loss the trustee of the employee share trust makes from the CGT event is disregarded.
SECTION 130-97 Stapled securitiesHistoryS 130-95 inserted by No 41 of 2005, s 3 and Sch 3 item 21, effective 1 April 2005. Act No 41 of 2005, s 3 and Sch 3 item 22 contains the following application provision:
Application
(1) The amendments made by this Schedule apply, and are taken to have applied, to acquisitions of shares or rights on or after 1 July 2004.
(2) In this item:
acquisition
, of a share or right, has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .
130-97(1)
This section sets out what happens if you *acquire a stapled security (within the meaning of Division 13A of Part III of the Income Tax Assessment Act 1936 ) that:
(a) is treated as a *qualifying share because of Subdivision DB of that Division; or
(b) because of section 139DQ of that Act is treated, for the purposes of that Division, as if it were a continuation of:
(i) a qualifying share acquired under an *employee share scheme; or
(ii) another stapled security (within the meaning of that Division) that is treated as a qualifying share because of Subdivision DB of that Division.
130-97(2)
The provisions (the applied provisions ) of Part 3-1 , this Part (except this section), Subdivision 768-R and Division 855 apply, with the modifications set out in subsections (3), (4) and (5), in relation to each *CGT asset that forms part of the stapled security in the same way as the applied provisions apply in relation to:
(a) a CGT asset that is a *share *acquired under an *employee share scheme; and
(b) a CGT asset that is a *qualifying share.Note 1:
The assets that form part of a stapled security are an ordinary share and one or more other interests that are either shares or units in a unit trust: see section 139GCD of the Income Tax Assessment Act 1936 .
Note 2:
There are modifications to this application in subsections 115-30(1A) and (1B) .
130-97(3)
The applied provisions apply as if an election under section 139E of the Income Tax Assessment Act 1936 in relation to the stapled security were an election in relation to each of the assets.
130-97(4)
The applied provisions apply as if the *cessation time for the stapled security were the cessation time for each of the assets.
Modification relating to cost base and reduced cost base
130-97(5)
Subsection (6) applies for the purposes of the application, in relation to a *CGT asset that forms part of a stapled security, of a provision of this Subdivision providing that the first element of the *cost base and *reduced cost base of a *share is its market value (worked out under sections 139FA to 139FF of the Income Tax Assessment Act 1936 ) at a time.
130-97(6)
The first element of the *cost base and *reduced cost base of a *CGT asset that forms part of the stapled security is so much of the market value (worked out under sections 139FA to 139FF of the Income Tax Assessment Act 1936 ) of the stapled security at that time as is reasonably attributable to the asset.
HistoryS 130-97 inserted by No 56 of 2007 , s 3 and Sch 3 item 21, effective 12 April 2007. No 56 of 2007 , s 3 and Sch 3 item 39 contains the following application provision:
(1)
The amendment applies to acquisitions of stapled securities, and of rights to acquire stapled securities, on or after 1 July 2006.
(2)
In this item:acquisition
has the same meaning as in Division 13A of Part III of the Income Tax Assessment Act 1936 .
Scope
130-85(1)
This section applies if:
(a) you *acquire an *ESS interest under an *employee share scheme; and
(b) Subdivision 83A-B or 83A-C applies to the ESS interest; and
(c) the ESS interest is, or arises because of, an interest you hold in an *employee share trust.
Application of Division 83A, Part 3-1 and this Part
130-85(2)
Division 83A (Employee share schemes), Part 3-1 (Capital gains and losses: general topics) and this Part apply as if you were absolutely entitled to the relevant *share or right:
(a) from the time of acquisition of the *ESS interest; and
(b) until you no longer have an ESS interest in the share or right.
Note 1:
An interest you hold in an employee share trust may give rise to an ESS interest because of the operation of section 83A-320 .
Note 2:
As a result of subsection (2) of this section, CGT event E5 might happen at the time of acquisition. This may result in the trustee making a capital gain. However, any capital gain made by the beneficiary would be disregarded under section 130-80 .
130-85(3)
However, if this section applies to you because an *associate of yours *acquired the *ESS interest, Division 83A , this Part and Part 3-3 apply as if your associate were absolutely entitled to the relevant *share or right (instead of you):
(a) either:
(i) if Subdivision 83A-B applies to the ESS interest - from the time of acquisition; or
(ii) if Subdivision 83A-C applies to the ESS interest - from immediately after the *ESS deferred taxing point for the ESS interest; and
(b) until your associate no longer has an ESS interest in the share or right.
Note:
Once the ESS interest has been taxed to you under Subdivision 83A-B or 83A-C , section 83A-305 (which treats the interest as having been acquired by you, rather than your associate) is no longer relevant. Subsection (3) of this section ensures that your associate then gets the same tax treatment as you would have, had you originally acquired the interest. This does not, however, imply a disposal from you to your associate.
Meaning of employee share trust
130-85(4)
An employee share trust , for an *employee share scheme, is a trust whose sole activities are:
(a) obtaining *shares or rights in a company; and
(b) ensuring that *ESS interests in the company that are beneficial interests in those shares or rights are provided under the employee share scheme to employees, or to *associates of employees, of:
(i) the company; or
(ii) a *subsidiary of the company; and
(c) other activities that are merely incidental to the activities mentioned in paragraphs (a) and (b).
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