Employee Share Schemes & SMSFs

9 Mar 2022

Written by

David Busoli, Principal

Recently I was asked if an employee, offered discounted shares in her unlisted employer under an employee share purchase scheme, could acquire them via her SMSF. Quite apart from any ownership restrictions contained in the employee share plan offer, from an SMSF position, the answer is no.

As the rights to acquire the shares attach to the individual, the ATO regard the acquisition by the SMSF as an acquisition from the individual. The shares would only be acquirable from the member if the company was listed – which was not the case. If the company was listed there would still be an issue as the acquisition from the member needs to be at market value, not the discounted price, otherwise NALI provisions could be invoked.

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