Interesting to read in yesterday’s Financial Review (AFR,10 March @ pg5) of the ATO’s continued crackdown on employee share and option schemes (ESAS schemes).
We drew your attention to the common ESAS tax issues in Issue #4 of The Assessment ‘Something for Nothing? Issues with issuing shares & options to employees’ published on 1 October 2007 <click here> to view. For those not familiar with the ESAS issues we suggest you take another look at Issue No 4.
Based on matters that cross our desk the ATO is likely onto a winner with this project. As a general rule most problems are largely attributable to a lack of awareness as to how to declare shares and options issued under an ESAS for tax purposes. There are however many finer points open to challenge and we are aware of several views advocated by the ATO that have been successfully challenged.
The AFR article focuses on the ATO’s use of section 264 notices to extract information from employer companies. For employees of ASX listed entities there is already a plethora of information available on the internet detailing options and/or shares issued to executive staff as well as the general staff populous. Hence targeted compliance reviews on employees of ASX listed employers should not be too complicated a task for the ATO.
It is in the private company domain where the section 264 notices could reveal significant non-compliance.
If you need any assistance on ESAS matters please give Rob Power a call on 03 8662 3200 or robp@webbmartinconsulting.com.au
PS. We still have places in our Sydney Workshop next Wednesday morning on “Taking Stock of Property & GST” <click here> for further details and register today to secure your place!
