If you have acquired qualifying shares or rights from an employee share scheme during this financial year, you should consider making an election in your income tax return for 2009.

You can choose when you are accessed on the discount received on those shares or rights by:

• making an election to be accessed upfront in the acquired year, or
• deferring the accessment to a later period eg. disposal date

If you decide to be accessed on the discount upfront, you must now make an election in your income tax return at question 24 by answering yes at the checkbox and include the total discount amount acquired for the income year.

If the election is not made, the discount will be accessed at the later date.

Exceptions

As the first $1,000 of the discount is not assessable, an election will not be required if the total amount of the discount is below $1,000.

For elections to be assessed upfront at a later time, a taxpayer must seek permission from the ATO using the appropriate form.

New Arrangements (Budget Changes)

Under the new arrangements, all discounts on shares and options under an employee share scheme, whether qualifying or non-qualifying, will be assessed in the year in which they are acquired. Therefore employees acquiring shares or options under qualifying share schemes will no longer be able to elect to defer taxation on their discount to a later time.

In addition, the $1,000 tax exemption will be limited to those employees with a taxable income of less than $60,000 after adjustment for fringe benefits, salary sacrifice and negative gearing losses.

 For further details, go to Employee Share Schemes