We are very pleased that both houses of parliament have passed with bipartisan support the Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021.

Pending Royal Assent that is expected in the coming days, we farewell cessation of employment as a taxing point for tax-deferred employee share schemes (ESS) in Australia for interests where their deferred taxing point is scheduled to occur on or after 1 July 2022.

What do these changes mean?

No longer will cessation of employment trigger a deferred taxing point.

In practice this means that if there are conditions that need to be satisfied prior to a vesting outcome is determined, such as performance hurdle testing, the original vesting time period can continue to apply post an employee leaving their employer without their leaving triggering a tax calculation before the scheduled date for any performance test.

What issuers need to do

Issuers should:

  • review current grants where a deferred taxing point is scheduled to occur after 1 July 2022 and communicate any change in participant experience to those impacted.
  • update plan rules and offer documentation where applicable for future grants
How Computershare will support our clients

Computershare will ensure our clients are well supported to manage this legislative change, by providing support with ESS tax reporting, updates to communications and plan documents, and communicating to impacted employees.

About Computershare Plan Managers

Over the last 35 years, Computershare Plan Managers has developed leading expertise in creating innovative plans, implementing engaging enrolment campaigns, and handling complex regulatory, reporting and tax compliance requirements across the globe.

Reach out to us today and discover how we can help you achieve employee share plan success.

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