Shares & Funds ESS - CGT + taxed upfront

Hi all,

I'm trying to figure out what's the CGT amount I need to pay if I sell my shares acquired by ESS.
I'm eligible to buy shares in my company (international) with 15% discount and sell it after 2 years of holding. Every tax year I'm adding the ESS benefits to my tax return as follows:

Taxed upfront scheme – not eligible for reduction
Discount from taxed upfront schemes – not eligible for reduction E: $X.xx

So for example:
On 01/04/2018 I've bought 1 share for $85 USD with market value of $100 USD and added $15 USD (converted to AUD) to that tax year income.
On 01/04/2021 I sell this share for $150 USD.
What would be the capital gain for this example: $50 (150 -100) or $65 (150 - 85)?

Thank you!

P.S. All figures should be converted to AUD by the conversion rate on the transaction date?

 

The ESS will contain a statement to seek personal tax advice. They can vary.

The discount will be assessable income in a ESS payg summary the employer will share with the ATO (no tax is deducted) at some point (often the vesting date rather than the issue date - depends. Often can be 2 years ). So you may have to pay 47% (marginal rate) tax on something you havent yet sold. When sold the costbase is the $85 paid + $15 discount (since it became income). The taxable gain could be 50% x $50. = $25 taxable.

If options on shares are involved it can be more complex since exercise of options just creates a new CGT asset and then a new 12mths wait is required.

 

Thanks Paul!
That was my understanding as well and you confirmed it.

Thanks again!