Tax Laws Amendment (2009 Budget Measures No. 2) Act 2009 (133 of 2009)

Schedule 1   Employee share schemes

Part 2   Consequential amendments

Income Tax Assessment Act 1997

43   Sections 208-205 to 208-215

Repeal the sections, substitute:

208-205 Distributions to employees acquiring shares under eligible employee share schemes

Division 207 also applies to a *franked distribution made by an *exempting entity if:

(a) the distribution is made to an individual who, at the time the distribution is made, is an employee of:

(i) the exempting entity; or

(ii) a *subsidiary of the exempting entity; and

(b) the employee acquired a beneficial interest in the *share on which the distribution is made:

(i) under an *employee share scheme; and

(ii) in circumstances specified as relevant in section 208-215; and

(c) the employee does not hold that beneficial interest as a trustee.

208-215 Eligible employee share schemes

(1) An individual acquires a beneficial interest in a *share in a company under an *employee share scheme in circumstances that are relevant for the purposes of paragraphs 208-205(b) and 208-235(b) if:

(a) all the *ESS interests available for acquisition under the scheme relate to:

(i) ordinary shares; or

(ii) preference shares to which are attached substantially the same rights as are attached to ordinary shares; and

(b) immediately after the individual acquires the interest:

(i) he or she does not hold a beneficial interest in more than 5% of the shares in the company; and

(ii) he or she is not in a position to control, or to control the casting of, more than 5% of the maximum number of votes that might be cast at a general meeting of the company; and

(c) the share is not a *non-equity share.

(2) An individual also acquires a beneficial interest in a *share in a company under an *employee share scheme in circumstances that are relevant for the purposes of paragraphs 208-205(b) and 208-235(b) if:

(a) the share is part of a stapled security; and

(b) Subdivision 83A-B or 83A-C (about employee share schemes) applies to the beneficial interest in the stapled security.