Significant changes to the employee share schemes (ESS) rules were announced in October 2014. Additional changes announced in the Budget will:
• exclude eligible venture capital investments from the aggregated turnover test and grouping rules (for the start-up concession);
• provide the CGT discount to employee share scheme interests that are subject to the start-up concession, where options are converted into shares and the resulting shares are sold within
12 months of exercise; and
• allow the Commissioner to exercise a discretion in relation to the minimum three-year holding period where there are circumstances outside the employee’s control that make it impossible for them to meet this criterion.
These changes will take effect from 1 July 2015.
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