Contact: Vessa Playfair
Deloitte
Director of Communications
+61 (0) 419 267 676

Contact: Joe Galea
Deloitte
Partner
+61 (0) 2 9322 7591

The 2006 Federal Budget has finally levelled the playing field in respect of employee equity ownership schemes involving listed stapled entities, says Deloitte Tax Partner, Joe Galea.

Prior to the budget changes, employees of listed stapled entities were unable to access the existing concessional employee share acquisition scheme (ESAS) tax rules for units in trusts that are stapled to company shares.  The ESAS rules provide significant opportunities for employees to own shares in their employers, and placed stapled entities at a distinct disadvantage to ordinary company employers.

With effect from 1 July 2006, the ESAS tax rules will be extended to stapled entities that are listed on the ASX.  This will extend the tax concessions to units in trusts that are stapled to company shares, a structure that is common particularly in the property and construction industry.

“This measure is to be welcomed,” said Joe Galea, “as it will help ensure that tax inequalities will not be an impediment to the attraction of talented people to the listed property industry.  However it is disappointing that the rules are not being extended to unlisted stapled entities, as the current tax rules apply to both listed and unlisted companies and there seems to be no logical reason to not extend the concessions to such unlisted entities.”