Rudd caves on employee share scheme

Amid growing criticism of the Rudd Government’s controversial changes to the employee share scheme, the Government will release an options paper examining alternative proposals.

Mr Swan made the announcement on Sunday with Assistant Treasurer Chris Bowen, citing growing concerns within the community.

“Given the community concerns with the proposed changes and the possible unintended adverse impacts on employee share scheme arrangements for ordinary employees, the government will be fast-tracking the consultation process.”

Unions and business joined forces to criticise the measure, which meant that those earning over $60,000 on their employee share schemes would have to pay tax upfront as opposed to when the stock was sold.

Among those issues to be covered in the options paper will revolve around the reporting requirements necessary to address tax avoidance concerns; the income threshold for accessing the $1,000 tax exemption for upfront taxation; whether there are circumstances under which it may be appropriate to provide for the deferral of taxation; and whether the tax law provisions which determine the market value of discounted and deferred shares or rights result in undervaluation.

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