We are very pleased to see the Government’s announcement that the reform of the rules dealing with the corporate regulation of employee share schemes are to proceed.
The corporate regulatory regime which has applied to offering employee equity in Australia has been a major inhibitor of the expansion of employee ownership.
The complexity of the offering regime to employees in unlisted entities has been a particular challenge. It is particularly significant in the context of start-up entities and the provision of equity in mature baby boomer unlisted entities.
The new regulatory regime provides a very sensible expansion of the existing relief that is provided to employees share schemes.
The relaxation of the rules dealing with offers of employee equity where there is no monetary consideration is a really important change. It removes inappropriate restrictions on the provision of free equity to employees.
EOA has been advocating for many years for the relaxation of the rules dealing with these offers so we are deeply encouraged to see these reforms introduced to Parliament today as part of the Treasury Laws Amendment (Cost of Living Support and Other Measures) Bill 2022.
The expansion of the monetary limit to $30,000 for each employee under a specific regime to provide offers to employees in unlisted companies is an important step forward.
The bill includes a number of significant improvements to the earlier consultation draft of the package, particularly in connection with the coordination of the new regime in a manner not to limit the scope of the existing relief provided to forms of equity allocations.
EOA are very supportive of all changes which simplify and facilitate the provision of greater employee equity.
These changes are especially important when examined in the context of the passing of legislation for the removal of the cessation of employment taxing event earlier this year.
