This Draft TD, issued on Wed 24.9.2014, and states that where a right to acquire a beneficial interest in a share is granted subject to shareholder approval and an employee acquires only a right to have the matter put to the shareholders and nothing more, that right is not an “indeterminate right” within the meaning of s 83A-340(1) of the ITAA 1997.
DATE OF EFFECT: When the final Determination is issued, it is proposed to apply both before and after its date of issue.
COMMENTS are due by 24 October 2014. ATO Contact: John Wynter – Tel: (08) 8208 1805; Fax: (08) 8208 1989; Email: john.wynter@ato.gov.au.
[LTN 185, 24/9/14]
Section 83A-340 of the ITAA97
83A.340 Application of Division to indeterminate rights
(1) This section applies if:
(a) you acquire a beneficial interest in a right; and
(b) the right later becomes a right to acquire a beneficial interest in a * share.
Example 1: You acquire a right to acquire, at a future time:
(a) shares with a specified total value, rather than a specified number of shares; or
(b) an indeterminate number of shares.
Example 2: You acquire a right under which the provider must provide you with either ESS interests or cash, whichever the provider chooses.
(2) This Division applies as if the right had always been a right to acquire the beneficial interest in the * share.