Frequently Asked Questions

Link Market Services Limited (LMS) is the employee share plan administrator for your employer. LMS provides administration services to your employer through the Equity Plan Solutions team.

Equity Plan Solutions is the division of Link Market Services Limited that provides employee share plan administration services to your employer.

You received an ESS Statement because a taxing point arose during the 2013-2014 financial year in relation to an employee share scheme that you participate in. You may be required to report the amount shown on the ESS Statement in your 2013-2014 tax return.

You will receive an ESS Statement if a taxing point arose during the 2013-2014 financial year in relation to an employee share scheme that you participate in. You should receive the ESS Statement in July or August 2014. Please wait until mid August to ensure you've received the most up to date version.

You may receive a revised ESS Statement if a taxing point for your ESS Interests occurred during June 2014. Please wait until mid August 2014 to determine whether a revised ESS Statement will be received.

No, you will not be able to see last year’s ESS Statement on this website. You will need to use the web address from last year to access your old ESS statement.

You would have received an 2012-2013 ESS Statement if a taxing point arose on your ESS Interests during 2012-2013.

Call the Link Contact Centre for further assistance. Please note that neither Link Market Services nor your employer can offer taxation advice.

For further assistance please visit www.ato.gov.au/essemployee

The ESS Statement shows an estimate of the taxable value (as at the taxing point) of your ESS Interests for which a taxing point arose during the financial year. You should report this taxable value in your 2013-2014 tax return.

Please note that the ESS Statement does not include taxable amounts for any independent sales of shares that may have occurred within 30 days of the relevant taxing point, nor any capital gains liabilities that may have arisen during the tax year.

If you received an ESS Detailed Tax Summary then this provides a break-down of the amounts provided in your ESS Statement, and outlines which plans the various transactions relate to. If you did not receive an ESS Detailed Tax Summary then please refer to the top of your cover letter where the applicable employee share scheme plan is referenced.

You must report your total taxable transaction amount(s) in your 2013-2014 income tax return. Section 12 of the income tax return form relates to your Employee Share Schemes and the labels in the form correlate with the labels in the ESS Statement provided.

Please note if you submit your tax return online at the ATO website or through a tax agent then this should be pre-populated with the relevant data provided in your ESS Statement

You should insert the relevant information from your ESS Statement under Label 12 (Employee Share Schemes) of your tax return.

Please note if you submit your tax return online at the ATO website or through a tax agent with access to the tax portal then this should be pre-populated with the relevant data provided in your ESS Statement.

Where you independently sell your securities within 30 days of the taxation point, the taxation value may vary, and these transactions will not appear on this statement. Instead you will need to source this information from your own personal records.

You will receive a revised ESS Statement in mid-August where you had a taxable transaction (including a sale) after mid June 2013 that relates to the 2013-2014 tax year.

Please note that your ESS Statement only relates to taxing points related to income tax. Where you sold shares during the year more than 30 days after a relevant taxing point, the sales proceeds will be subject to capital gains tax. This will not appear on the ESS Statement.

If you disagree with the information provided in your statement please firstly refer to the ESS Detailed Tax Summary (if you received one). This statement provides you with a detailed breakdown of how the aggregate amount reported on the Employee Share Scheme Statement was calculated. Check this against your records.

Please note that the ESS Statement only provides an estimate of the taxable amounts. You may choose a different valuation method to determine market value for the purposes of your tax return. Please note however that the amount shown on your ESS Statement has been reported to the ATO.

Where you still disagree with your statement information you should refer to your tax advisor or other professional advisor for guidance. Please note that neither Link Market Services nor your employer can offer taxation advice.

Lastly where you disagree with the amounts in your statement please confirm this in writing to ess.operations@linkmarketservices.com.au so Link can investigate accordingly. Alternatively you can call the Link Contact Centre for assistance.

For further assistance please visit www.ato.gov.au/essemployee

• Please refer to the ESS Detailed Tax Summary (if you received one) for a detailed breakdown of how the aggregate amount on the ESS Statement was calculated. Also refer to your initial offer documentation including the Employee Plan Booklet that would have included a tax summary to help you understand the taxation points.
• If you require taxation advice, please refer to your accountant or financial advisor.
• Call the Link Contact Centre for further assistance. Please note that neither Link Market Services nor your employer can offer taxation advice.
• For further assistance please visit www.ato.gov.au/essemployee

No. You have always been required to disclose income, claim a concession and pay tax relating to your ESS Interests under applicable tax legislation. Employers are required to provide employees with an ESS Statement by the 14 July each year detailing any taxable transactions relating to those ESS interests. This information should then be included in your income tax return. Your employer is also required to provide this information to the ATO by 14 August to reconcile against your income tax return.

• ESS interests acquired pre 1 July 2009
  Neither your employer nor Link has any way of knowing if you have paid tax upfront for your grants. If your ESS Statement indicates a taxing point arose during the year that relates to an ESS Interest on which you have already made an election and paid tax, then you should retain proof of this election with your tax records showing that:
  • You made a tax election in another tax year; or
  • Your cessation of employment was different from the date shown.
• ESS interests acquired post 1 July 2009
  From 1 July 2009, you can no longer elect to be taxed upfront for any ESS interests you acquire after this date. The taxing date for interests acquired after 1 July 2009 is determined by the scheme itself and your own personal circumstances. Check the nature of the scheme with your employer or your tax agent. The taxation summary in your offer document should also help.

Your ESS statement reflects any discount amounts that are subject to tax. This varies depending on the rules of the plan(s) you participate in.

The discount for ESS interests that are being taxed immediately or upfront is the market value of the ESS interests less any post tax money that you paid towards the cost of the ESS interest (consideration) when you acquired them.

The discount for ESS interests that are at a taxing point is the market value of the ESS interest less any post tax money that you paid towards the cost of acquiring the ESS interest and other costs (for example brokerage or administration fees).

For more information, see the ATO ESS Guide for Employees or the ESS FAQ or visit www.ato.gov.au/essemployee (http://www.ato.gov.au/businesses/content.aspx?doc=/content/00224640.htm) (http://www.ato.gov.au/individuals/content.asp?doc=/content/24703.htm).

If you receive ESS interests under an upfront scheme this is called a tax exempt plan. This is a plan where you may be able to reduce your income and Capital Gains Tax amount by up to $1,000. To do so you must satisfy certain conditions including not having an adjusted taxable income of more than $180,000. Adjusted taxable income includes your income from all sources, not just employment. The tax summary in the offer documents should be clear about whether the plan meets the required conditions.

This means that the plan does not comply with the conditions for taxation deferral, and you will be taxed immediately on the full amount of any discount that you receive on the ESS interests. The tax summary in the offer documents should provide further information.

When your employer grants/offers you ESS Interests, they should tell you which type(s) of scheme(s) are available, whether taxed upfront or tax deferral. This means that before you receive ESS interests, you should know whether the scheme chosen will allow you to be taxed upfront or taxed at a deferred taxing point (given that your own circumstances allow deferral). The tax summary in your offer documents sets this out for you.

To confirm the discount you received under each type of plan, look at your ESS Statement. Your employer will only have recorded discounts for schemes that are relevant to you.

For more information you can ask your tax agent or refer to www.ato.gov.au/essemployee. This guide will also help you determine if your own circumstances prevent tax being deferred, where you receive ESS interests under a deferral scheme.

If you receive ESS interests under an upfront scheme, your taxable income will be calculated on the discount received at acquisition (as shown on your ESS Statement), and reduced by up to $1,000 for a scheme that is eligible for reduction. Where you earn more than an adjusted taxable income of $180,000 the discount will not be reduced.

For an upfront scheme – eligible for reduction, when you prepare your tax return, you must calculate your taxable income (after adjustments) for the income year in order to determine whether you are able to access up to the $1,000 reduction.

You calculate your taxable income (after adjustments) by adding the following amounts together:

• Taxable income (including the total amount of all ESS discounts);
• Total reportable fringe benefits (if any) for the income year;
• Reportable superannuation contributions (if any) for the income year; and
• Total net investment loss for the income year.

If you receive ESS interests under a deferral scheme and your circumstances allow deferral of tax, you will pay tax on the discount calculated at the deferred taxing point in that income year. See question 13 above to understand how the discount is calculated.

The cessation time is generally the point in time where all restrictions on selling your ESS interests are removed sometimes as a result of you ceasing employment. More detailed definitions of what qualifies as the cessation time are included below.

Shares
For shares that have restrictions and meet certain qualifying conditions, the cessation time is the earliest of the following:

• When you dispose of the shares;
• The later of when the disposal restrictions cease to have effect and the forfeiture conditions cease to have effect in relation to the shares;
• When you cease employment the employer who provided you the shares; or
• Ten years from the date you acquired the shares.

Rights
The cessation time for qualifying rights is the earliest of the following:

• When you dispose of the rights – other than by exercise;
• When you leave the employer who provided you the rights;
• When the rights are exercised, if the shares that are acquired by exercising the rights have no restrictions or conditions affecting their subsequent disposal or you forfeiting ownership of the shares;
• If there are restrictions or conditions on the shares acquired by exercising the rights, when the last of the restrictions or conditions cease to have effect; or
• Ten years from the date you acquired the rights.

For more information, including an explanation of qualifying conditions, refer to the ATO ESS Guide for Employees or the ESS FAQ (http://www.ato.gov.au/businesses/content.aspx?doc=/content/00224640.htm) (http://www.ato.gov.au/individuals/content.asp?doc=/content/24703.htm).

Your employer is required to withhold tax on your ESS Interests if you have not provided Link or your employer with your file number (TFN) or Australian Business Number (ABN) before the end of the financial year.

Where withholding tax applies, your employer is required to remit the amount withheld to the ATO. The rate of withholding is calculated by adding the highest individual marginal tax rate to the rate of the Medicare levy for that financial year.

As an ESS benefit is not a cash benefit, your employer may recover the amount of withholding tax paid from you. Your employer can do this by offsetting the amount of withholding tax paid against any other amounts owed to you, such as salary and wages.

You can claim a credit for the amount of withholding tax you paid on your income tax return. The total amount of withholding tax paid for which you can claim a credit will appear on your ESS Statement.

If you have made a TFN declaration in relation to your employment, you will be taken to have provided your TFN to your employer and no withholding tax will be payable.

Foreign source discounts include any amounts of assessable income from a foreign source or foreign ESS interests received during the income year.

For further information, please visit "Foreign income exemption for Australian residents and temporary residents – employee share schemes" (http://www.ato.gov.au/businesses/content.asp?doc=/content/76535.htm).

If this applies to you, you should seek your own independent advice when completing your income tax return.

Your taxable amount (or discount) for any ESS interests for the 2013-2014 tax year is stated on your ESS Statement. It is calculated based on the type of schemes you participate in and whether tax is upfront or deferred. Your employer will only have recorded discounts for schemes that are relevant to you.

Where you received an ESS Detailed Tax Summary please refer to this for further information on how the aggregate amount was calculated and the tax value used.

The cost base of the ESS Interest is any money you paid to acquire the ESS Interest (e.g. share purchase amount, option exercise price), plus any other costs associated with acquiring, holding and disposing of the ESS Interest (e.g. brokerage fees). Where you did not pay to acquire the ESS Interest (e.g. vesting of free shares) you do not have a cost base and the full amount of the ESS Interest is taxable.

Where there is an allocation, the issue or purchase price is used. Where there is a sale the sale price is used.

For all other transactions the market value has been calculated by multiplying the number of securities in the transaction by the 5 trading days (up to and including the day of the transaction) volume weighted average price of the underlying listed security.

Please note that some companies may choose to vary this calculation method. If your market value has been calculated differently your statement will describe the alternate calculation method.

If you believe the amounts are different from your own calculations you will need to seek your own independent advice about completing your income tax return.

Neither Link Market Services nor your employer can offer taxation advice.
For more information, refer to http://www.ato.gov.au/essemployee or speak with your accountant or financial advisor.

Only ESS Interests that are taxable in the 2013-2014 tax year have been included in your ESS Statement.

If you hold other securities that were not acquired under an employee share scheme, they are not ESS interests. This means that the ESS reporting rules will not apply to them.

If you do not have the money to pay any tax liability, please contact the ATO to discuss this with them further.

You will receive a revised ESS Statement in mid-August where you had a taxable transaction (including a sale) after mid June 2013 that relates to the 2013-2014 tax year.

You should have received this statement by mid August. This statement supersedes the previous one, and the information should be included in your income tax return consistent with the instructions provided in the accompanying letter.

The revised statement will be clearly labeled at the top as an ‘amended summary’. If the second statement you received was not a revised statement, then please call the Link Contact Centre for assistance.

Your Online Reference Number is a unique number supplied to you for access to this year’s online statement, it is also quoted on the cover letter or cover email you would have received.

This detail is close to the bottom of the communication you would have received.

We can supply this number over the phone. (Note: this is only an option if SRN/Employee ID, full registered name and address are currently recorded on the holding are provided.)

Alternatively we can send you the details to your registered address or registered email address.

You can access your ESS Statement and accompanying tax documentation online:

• Go to http://eps.linkmarketservices.com.au/ATO-2014/Employee/; and
• Enter your Online Reference Number, surname and postcode.

Note: if you did not have any taxable transactions occur to your ESS interests during the 2013-2014 financial year you will not have been issued with an ESS Statement and no action is required from you.

If you are having trouble accessing your statements online then please call the Link Contact Centre for assistance.

You will only receive an ESS statement if you had taxable transactions occur in this financial year in the employee share schemes you participate in.

If you did not have any taxable transactions occur to your ESS interests during the 2013-2014 financial year, you will not have been issued with an ESS Statement and no action is required from you.