Tax Changes to Employee Stock Option Schemes

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09 / Dec / 2014


Technology start ups (and their employees) look likely to receive a bonus from the Abbott government which has finalized changes to the way employee share options are taxed.

Stock options will now be taxed on sale of shares, rather than receipt, provided that shares are held for at least 3 years.  To be eligible, companies must have an aggregate turnover under $50 million and be unlisted and unincorporated for less than 10 years.

The government will also extend the maximum time for tax deferral from 7 to 15 years.  The upfront tax concession of $1000 for workers earning less than $180,000 will be retained.

It is expected these new rules will come into effect from 1 July 2015.