Income Tax (Transitional Provisions) Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-40 - RULES AFFECTING EMPLOYEES AND OTHER TAXPAYERS RECEIVING PAYG WITHHOLDING PAYMENTS  

Division 83A - Employee share schemes  

Subdivision 83A-A - Application of Division 83A of the Income Tax Assessment Act 1997  

SECTION 83A-5   Application of Division 83A of the Income Tax Assessment Act 1997  

83A-5(1)    
Division 83A of the Income Tax Assessment Act 1997 applies in relation to an ESS interest if:

(a) the interest was acquired on or after 1 July 2009; and

(b) the relevant share or right (within the meaning of Division 13A of Part III of the Income Tax Assessment Act 1936 , as in force at the time (the pre-Division 83A time ) occurring just before Schedule 1 to the Tax Laws Amendment (2009 Budget Measures No 2) Act 2009 commenced, ( former Division 13A ) was not acquired (within the meaning of former Division 13A) before 1 July 2009.

83A-5(2)    
Furthermore, Subdivision 83A-C of the Income Tax Assessment Act 1997 (and the rest of Division 83A of that Act, to the extent that it relates to that Subdivision) also applies in relation to an ESS interest if:

(a) all of the following subparagraphs apply:

(i) at the pre-Division 83A time, subsection 139B(3) of the Income Tax Assessment Act 1936 applied in relation to the interest;

(ii) the interest was acquired (within the meaning of former Division 13A ) before 1 July 2009;

(iii) the cessation time mentioned in subsection 139B(3) of the Income Tax Assessment Act 1936 , as in force at the pre-Division 83A time, for the interest did not occur before 1 July 2009; or

(b) all of the following subparagraphs apply:

(i) at the pre-Division 83A time, section 26AAC of the Income Tax Assessment Act 1936 , as in force at that time, ( former section 26AAC ) applied in relation to the interest;

(ii) the interest was acquired (within the meaning of former section 26AAC ) before 1 July 2009;

(iii) an amount has not been included in a person ' s assessable income under former section 26AAC in relation to the interest before 1 July 2009.

83A-5(2A)    

To avoid doubt, for the purposes of subparagraph (2)(a)(i), section 139CDA of the Income Tax Assessment Act 1936 applied to the interest at the pre-Division 83A time if the taxpayer in question first became or becomes an employee, as mentioned in that section, before the cessation time for the interest. It does not matter whether the employee so became or becomes an employee before, on or after the pre-Division 83A time.

Note:

Section 139CDA was about shares or rights acquired while engaged in foreign service.

83A-5(3)    
Subsection (2) applies despite section 83A-105 of the Income Tax Assessment Act 1997 .

83A-5(4)    
If Subdivision 83A-C of the Income Tax Assessment Act 1997 applies in relation to an ESS interest because of subsection (2):

(a) do not include an amount in your assessable income under subsection 83A-110(1) of that Act in relation to the ESS interest to the extent that the amount relates to your employment outside Australia; and

(b) subject to subsection 83A-115(3) or 83A-120(3) of that Act, whichever is applicable, treat the ESS deferred taxing point for the interest as being:

(i) if paragraph (2)(a) of this section applies - the cessation time mentioned in subparagraph (2)(a)(iii); or

(ii) if paragraph (2)(b) applies - the earliest time at which an amount is included in a person ' s assessable income under former section 26AAC in relation to the interest; and

(c) treat the reference in subsection 83A-115(3) or 83A-120(3) (30 day rule for ESS deferred taxing point), whichever is applicable, of that Act to the time worked out under subsection 83A-115(2) or 83A-120(2) of that Act as being a reference to the time worked out under paragraph (b) of this subsection; and

(d) treat the requirements in paragraphs 83A-310(1)(a) , (b) and (c) of that Act as being satisfied in relation to the interest if, and only if:

(i) if paragraph (2)(a) applies - the 2 requirements mentioned in section 139DD of the Income Tax Assessment Act 1936 (as in force at the pre-Division 83A time) are satisfied in relation to the interest; or

(ii) if paragraph (2)(b) applies - the requirements in paragraphs (8D)(a), (b) and (c) of former section 26AAC are satisfied in relation to the interest; and

(e) Subdivision 14-C in Schedule 1 to the Taxation Administration Act 1953 (about TFN withholding tax (ESS)) does not apply to the ESS interest; and

(f) if paragraph (2)(a) applies:

(i) for the purposes of Division 115 of the Income Tax Assessment Act 1997 (Discount capital gains and trusts ' net capital gains), treat the ESS interest as having been acquired by an individual when the individual acquired the legal title in the share or right of which the ESS interest forms part; and

(ii) for the purposes of Division 392 in Schedule 1 to the Taxation Administration Act 1953 (Statements), disregard any election made under former section 139E of the Income Tax Assessment Act 1936 ; and

(g) if paragraph (2)(b) applies - paragraph 82-135(m) of the Income Tax Assessment Act 1997 does not apply in relation to the ESS interest.