Option shemes guts

The most basic terms of Options. What options for European deposit insurance? Should one invest in mutual fund retirement schemes? When the scheme is revenue approved then there is relief from income tax. CGT, if you do! Sorry to resurrect this thread, I have a question relating to foreign currencies. The RTSO is payable on the difference between the market value of the share on the date of exercise and the option price paid. You now only have 1 month, and the revenue highlighted the fact, tax payable is considered income tax at the higher rate. Or would they have to pay both CGT and Income tax?

Prior to 2003 you had a year to pay up! And if so how does that work? You could even sell the shares and break even and not pay any CGT. There is income tax when he exercises the option. It is dated 13 July 2009. CGT loss of money is available. When then sell the shares you pay cgt on the profit. But whenever he sells the shares on to someone else and makes a profit there is CGT. This is a common enough thing that companies do with their compensation and benefits scheme. Your base cost for CGT will be reduced as a result.

Often your company will notify Revenue if you exercise any options. Exercising share options does NOT attract CGT. CGT too on any gains after he disposed of the shares as you pointed out. Kind Regards dbran Correct. Exercise the option and never sell the share in which case only the RTSO on any benefit received is paid. If an employee is part of an employee share option scheme and the option is excercised they have to pay only CGT? You use the RTS01 form and send it in along with a cheque to the collector general. As the share has been acquired and disposed of on the same day there has been no uplift in value and so capital gains tax does not apply.

Hi You pay income tax on the difference between the market price and the price of the share option. If you would provide a source to your information I would be grateful as I would be interested in knowing if the rules have indeed changed and I will stand corrected. You used have 12 months to pay up after realising a profit. This is as with any sale of shares. You will still pay CGT in a similar manner. General not later than 30 days after the date on which the share option is exercised. In the case of the OP it sounds like the company has given him share options.

So he only pays income tax on the profit when he exercises these options, not CGT. Essentially it taxes the benefit you have received in purchasing the share at below market value. Hope this has been helpful. There is CGT due if you subsequently sell the shares and make a profit. It seems that they tax a portion of any dividends, is there taxes to be paid on those in Ireland? The rules you are referring to apply to Shares not Options.

There is also a share scheme which as you said attracts capital gains. CGT paid by the person who exercises the option. An individual pays RTSO on the exercise of a stock option. Disposing of the share at a later date attracts the same CGT rules as apply to any other share transaction. Exercise the option and dispose of the share at a later date. We may be misunderstanding each other.

Also, what is the story with US withholding taxes. Income tax and CGT. Next step was to set up trading settings for the robot. It is important to say that name and description should have been attractive and informative so other traders would have found it attractive and decided to trade with exactly that robot. IQoption Robots: Envelope, SSMA, Alligator, Bollinger, SMA and other. IQoption Robots Constructor mode asked for deeper understanding of all trading indicators. Design Your Own IQoption Robots! Traders could have picked different trends for their IQoption Robots: Envelope, SSMA, Alligator, Bollinger, SMA and other. Filters were meant to choose from different option types, period, percentages and assets.

Those who wanted could have skipped a testing period, and start trading instantly. The testing phase was equal to real trading and traders could simply follow their robot and learn from every placed trade. IQoption is considered to be a very popular broker and if you want to find out more general information, read our IQoption broker review here. The great advantage of IQoption is that traders are allowed to practice on a demo account first. This detailed article had the intention of providing information about IQoption Robots auto trading. The third phase was testing, which was great because traders could check how their IQoption Robots trades without investing real funds. Before publishing the robot settings, traders needed to invent a name for their IQoption Robots and describe its features.

It is simple to start trading with IQoption. We want to make clear that if you started trading with IQoption Robots and created your own robot there, it was not private and other traders could have used your robot too. Wizard and other was for traders who wanted to build a robot using advanced trading tools. It was not possible to create a successful trading robot if you did not know anything about a certain indicator. Videos provided step by step guides and were helpful in every part of development. IQoption Robot is closed. IQoption has had various options and tools you could have used while constructing the robot.

Constructor mode allowed traders to choose between an already prepared robot scheme, or they could have just started all over and made their own software for auto trading. This detailed article had the intention of providing information about IQoption Robots auto trading software that was meant to provide a unique trading experience for traders who have dived into binary options world. IQoption used to give traders the opportunity to choose between creating or using already prepared versions of robots. It is considered that experienced traders know which trading patterns and indicators they want to use. If you have more trading experience or just wanted to develop something unique, IQoption used to let you basically build your own trading robot. Traders were welcome to choose a robot that was already made by other traders, or they could have created their own robot.

Traders had to be informed about all types of mathematical tools and aspects of indicators that work together. Traders could just choospreferreded iqrobot from the catalog. IQoption Robots has had the purpose of copying trades and it was a unique solution for binary trading. If they were satisfied with all the settings, traders could publish their settings and started trading for real. There were also different trading indicators that were meant to be implemented into IQoption construction mode. The Intended Use of IQoption Robots? This amazing feature also had allowed traders to begin developing their own trading robot.

It was delightful to see how broker gives the same opportunity to traders. Testing a robot before trading used to help traders to understand how real market conditions work and they could have improved their success rates. You were able to use this opportunity and do the same thing too. IQoption broker review here. Every IQoption Robots had the option of being tested before actual trading. IQoption has supported Robot development with video tutorials that were helpful for traders. IQoption Robots catalog used to offer to choose robots by different filters. First of all, traders could have chosen a trading pattern, that could have already been prepared or they could have personalized it according to their preferences.

Traders just needed to click on Run Robot button and start customizing their robots. To motivate traders, IQoption also awarded its traders if they managed to develop a precise and successful robot. Some of the available indicators are ATR, RSI, MACHD, Stochastic etc. Demo account is always useful because it helps users test the trading platform and invest without making any risks. This method is opted when the trader is not sure of the direction but anticipates major price movement in the security, which increases the value of one of the options chosen and raises the chances of unlimited profit with limited risk. Case 3: The security price moves downwards to Rs 300 on the expiry day.

Call and Put options at the same time for the same security and expiry date, where the strike prices of both the options are at equidistance from the underlying price. Call option at a lower strike price and a Put option at a higher strike price at the same time for the same security and expiry date. Case 1: If the security price moves upwards to Rs 380 on the expiry day, the Put option at Rs 360 expires worthless and the Call option at Rs 340 gets executed. When both Call and Put options are bought, it is called a Long Gut Spread, and when both Call and Put options are sold, it is called a Short Gut Spread. Call option gets executed. Description: This is a neutral option method, where if the price moves on either side, profit on one option will reduce the loss of money on the other option. ATM Put for Put Option and lower strike price than ATM Call for Call option.

Also the cost involved in Long Guts is less than that needed in a Long Strangle. Example: A trader sells Tata Motors ITM Call option and Put option of January series at strike prices Rs 340 and Rs 360 at premiums of Rs 20. Provisions were dropped that would have benefited the LGBT community and Republicans forced Obama and Democrats to make it explicitly apparent that women would not be able to have control over their uterus after health care passed; insurance companies and the government could still prevent women from getting abortions. Republican cries of a socialist takeover of health care were given credence. Senators except for Sen. DVD of every Michael Moore film. Reform will get closer to being the kind of reform this country needs when progressives are willing to take uncomfortable positions that put the politicians they think they have to vote for or else in positions where they have to support the uncomfortable position progressives are taking in order to win.

In November 2009, when a version of health reform first passed in the House, Jane Hamsher rightfully challenged Rep. Jane Hamsher of Firedoglake and David Sirota, author of The Uprising: An Unauthorized Tour of the Populist Revolt Scaring Wall Street and Washington, are still working to keep the movement for a public option alive by delivering petitions to Sen. Third, because of this inability to control costs or realize administrative savings, the coverage and benefits that can be offered will be of the same type currently offered by private carriers, which cause millions of insured Americans to go without needed care due to costs and have led to an epidemic of medical bankruptcies. Medicare for All and one for a weak public option they thought they might be able to get. Really, what happened is insurance companies won at the expense of American taxpayers. In fact, the same problems that affect and impact elections decimated the movement for real reform. Medicare for All through. They did not get a public option. Bennet has a primary challenger who is also publicly stating he is for the public option, Hamsher and Sirota are making it possible for voters to apply pressure on the primary so Bennet might take action.

Hey, wait a minute. Interests who have won big in the fight for healthcare tugged the bill in the direction they wanted healthcare to go as much as they possibly could. One hundred dollars a day. You just might get the pragmatists to compromise and pass a public option. And as you said, those who have it are going to be forced to buy a defective product. So, everything was about the market and how the market could correct healthcare and talk never centered around making health care a public good. Antichrist Obama to advance support for his extreme Muslim Stalinist beliefs even further did not occur. Obama declared the health reform enshrined in America. Virtually all of the reforms being floated by President Obama and other centrist Democrats have been tried, and have failed repeatedly.

Talk with progressives in Congress fell on deaf ears, unfortunately. Supporting the public option now will at best lead political leaders into a battle that will result in a compromise where we get a few more tiny reforms that could have been passed into law at anytime. Also, take a look at this fact sheet Firedoglake put together before the vote on Sunday. And, to those who wish for a public option, join the ongoing fight for single payer. The public option successfully distracted those for reform. Michael Moore, director of Sicko and outspoken advocate for a Medicare for All system in America, said on Democracy Now!

Again, during October 2009, doctors and nurses from all over the nation were recruited by the Mobilization for Healthcare for All to engage in acts of civil disobedience in insurance companies. America has a moral imperative to provide security through healthcare to all of its citizens like other industrial democracies do. The Baucus 8 were arrested on May 5th for challenging Sen. Careful examination of science and experience do. Hamsher and Sirota are looking to force Sen. Why all these victories for Republicans and conservative Democrats? The longer the process wore on, the more people abandoned their vocal support for a Medicare for All system. He explained the difference between the public option and Medicare for All. Second, what did the movement for Medicare for All do already to try and get 51 senators and a majority of the House to support real healthcare reform even as the Obama Administration was compromising on healthcare with unyielding Republicans and forcing weak progressives to fall in line with the intention of ending the reform process soon? Such a belief was and still is questionable. The problem with continued willingness to support the public option is that it has the potential to be driven by people who misunderstand what just happened here.

Republicans and Blue Dogs were protecting the well being of insurance and pharmaceutical companies at the expense of consumers or citizens in this country. The health care policies America needs will be enacted when people are more concerned with the policies on the table and less concerned about the future of political leaders who might lose if they support the change they believe in. So, a few questions need to be asked before pressing on with campaigns for healthcare. Margaret Flowers of PNHP became a lightning rod for the movement for real healthcare reform especially after appearing in an edition of Bill Moyers Journal in February of this year. What did the bill reform? At the end of October, Matt Hendrickson, a doctor, risked arrest at a Cigna Office near Los Angeles. Well, part of it is the framework. Doctors and nurses participated in these actions. Michael Bennet of Colorado. The Mad as Hell Doctorsled a tour across the nation to create attention for a Medicare for All system in this country.

Americans are still not going to have health insurance. Public Option Delay Reform Even More? Yet political winds do not make good health policy. And we offer our congratulations to both Stephy and Luke. Rutgers Coach Terry Shea described the feeling after the Hokies ran his team through the Lane Stadium Cuisinart last week. One thing that was always impressive about those Nebraska teams was the scores of their games. WVU has a great shot at winning in Morgantown. No more special teams snafus.

As an aside, we relocated to Durango, Colo. But figuring there was no time like the present, he dropped to his knee and proposed. Fortunately, Beamer has both. Big 8 Conference teams would roll into Lincoln, only to be humiliated by 40, 50, or sometimes 60 points. UCLA and Stanford: Heck with USC and Washington, the teams with guts are the Bruins and the Cardinal. But being ranked in the top five in both polls is terrific.

Not only are the Hokies beating teams, they are dominating and humiliating them. Take a look at Akron, ECU and Rutgers linemen on their knees as Tech backs come firing through the holes. Luke had been planning for months on proposing to Steph and, if you can believe this, even asked for my permission last spring. Tech fans: Even Beamer congratulated the fans for sitting through that Rutgers games. Texas after losing its starting quarterback in the first quarter. Huskers would have most of these games decided at halftime allowing Osborne to play his reserves in the second half.

Texas Football Guide, we just put in a call to Dave. As you may know, Virginia Tech has copied much of the Nebraska system and brought it to Blacksburg. It was then that he would pop the question. Big East foes who were either ranked or undefeated at the time of the game. NortonGary, thanks so much for the note. Big plays are a killer against Miami. Virginia Tech publications from days gone by are still on the shelf. Now, PSU can concentrate on Iowa, Indiana and their other big rivalry games. Call me obsessive, but I want to have the numbers on both Antoine Walker and Turner Gill at my fingertips if need be. Beamer said after the Rutgers game.

The loss of money of Shyrone Stith to the NFL a year early was a blow, but Suggs has been sensational thus far. Eventually they went back to their seats, which were still surrounded by many of their diehard fan friends. Penn State rivalry after 96 games. So though in most respects that night turned out differently than most people planned, it was still memorable, and for some, even more than for others. WVU Mountaineers: Last year, WVU lost to BC and Maryland. His parents were alerted to be sure to be watching and he knew, of course that my wife, Connie, and I would be glued to the TV. Other than the Virginia Tech publications dating back over the years, the policy has been to toss the various publications from the opposing schools into the recycling bin at the end of each season. Huskers, the Hokies have a great big veteran offensive line and a Heisman candidate in the backfield in Michael Vick.

Hokies are in the thick of the BCS title hunt again. Nearly all were blowouts, especially those played in Lincoln. Big Red power in the Midwest every year. Back then, Tom Osborne was regarded as one of the great coaches in the country. Tech has sold out every home game since the end of the 1998 season. With my blessing in hand, he laid his plan. He is averaging more than seven yards per carry and looks like a pro prospect.

When the lightning came, along with the rain, Steph and Luke went undercover for a while. The stomping of the feet by the band and the fans sitting in the new north end zone bleachers makes the kickoffs impressive. When the game was finally canceled, Luke faced a dilemma. Huskers would have won the title. Lee Suggs: In the first three games, Suggs has rushed for 288 yards and seven touchdowns. They were already soaked, having left their ponchos in the car.

Strength coach Mike Gentry has visited Lincoln and the Hokies use most of the same weight training, speed, and agility drills that are used at Nebraska. TV spots too, kid. Huskers offensive staff on speed option schemes that worked for Nebraska and they have worked so far for Vick. There was another story on the night of Perfect Storm II that you may not be aware of. Getting experience for younger kids. Penn State rivalry will resume. Like Osborne, Beamer plays everyone on his roster.

This is the seventh year in a row Tech has been ranked in the top 12 at some point during the season. Luke Constantinides, a 1998 graduate. Not thinking too clearly, I guess, but understandable given the excitement of the night. Remember folks, Suggs is just a sophomore. Orange Bowl be played in Miami in January? But they were all there again and our entire team appreciates the energy they give us every week.

Lane Stadium has just been expanded and will grow even larger in coming seasons. The Huskers growing legion of fans sold out every game in a stadium that had just been expanded to meet the growing demand. In addition to the changes above, the Big Idea in the plan is to have more people paying tax. Trade Union Subscriptions are to be abolished. Lots of reaction to the 4 year National Recovery plan issued today, but we wanted to give you a bit more information on what income tax changes have been signaled today in the 140 page 4 year plan. Rent Relief Tax Credit will be removed by 2017. Age Tax Credits to be abolished over the next few years. The BIK exemption on employer provided childcare is to be removed.

It seems that the tax system has evolved around one part of the business sector, in terms of employee share ownership, and has actually disadvantaged the other. Remote access for Parliamentary Computing Network account holders. Barry Jones; and I represent a Sydney metropolitan seat for the government. Rick Taylor, who prepared our submission to the Ralph Business Review, to fill in the details. Really, what we have is employees participating in the future growth of these companies. They have got blue sky potential, and we want to empower the company to bring people in to help them live that blue sky. Yes; and also in the States. They have had a long time to work where all the loopholes are. Basically, all venture capitalists in Australia are managers, and they need to have something to manage when they are investing.

If they think there is any way of avoidance in there, we would love to work with them and build in some rules that they can see are helpful. If you get the valuation and there looks like there has been some avoidance, then surely the commissioner would come in and challenge the valuation. But, if they are focused in doing it, they will work their guts out to build that capital up. Thanks very much for coming along today. This is for exactly the same profit. The CEO has a lot less impact. Track bills, Senators and Members. That is a separate issue altogether. But I am still not convinced at this stage about the actual outcome.

In other words, they are liable for CGT in the same way as anyone else is who gets options. Like the five per cent rule, it just seems too arbitrary and too small a number as it applies to a venture capital backed company. But to go to 30 per cent, for example, would have significant and serious consequences for large companies. They are just making the rules unbelievably complex. If we get the rules right on CGT reform, then we can go places; and I do not doubt that, with our intellectual property and our lateral skills, we can be every bit as good as anyone else in the world. It is worth pointing that out, for a start.

There are other things that are going to lead you to properly value at the start. PAYE taxpayer and I am happy to be, and my wife is. Under Ralph, that will be a capital profit and only half of that will be included in your assessable income, so 34c is the tax. We have had a few people say that to us. So they are just doing do that to manage risk, so that you have a pool of venture capital investments instead of just exposure to one? That is the crucial thing. At the moment, you get tax free exemption if those trusts are wholly owned by those pension funds. In relation to listed companies, you will not, because the listing rules require the employee share plans to be voted on by an AGM or an extraordinary general meeting. We can do it. We have got people working together with the providers of equity, to achieve the same results. There was a rewrite of these provisions in 1995, and I think there was a bit of avoidance going on, and it just went too far.

Yes, that is right. In the second area, we would like to see replaced the five per cent arbitrary limitation on the ownership and control provisions. We could have a look at the example which I have got here. The tax office has covered a whole bunch of scenarios where I am wrong, and I am quite happy to work with them. There are three areas, however, in which on a practical basis this committee can help us achieve our objectives. Australians working in the IT sector in Silicon Valley, do you have evidence of people whose skills are needed in Australia but who have not taken up a position here because of the share ownership arrangements? And it would fix your problem to limit that regime to proprietary limited companies? Come in here and do it in conjunction with the guys who are already doing it. You have got 35 per cent of the shares in the company.

Let us, within that, recognise that there is a special need for us to acknowledge the new paradigm of growth. You do not subcontract? So there is some extra work to be done there. You do not need to have complicated rules up front. American pension funds have got come in here and do the whole thing themselves. Moving on to the valuation point, if you got that regime where a key employee could take more than five per cent and have it taxed on disposal as a capital profit, then you do need an independent valuation, otherwise you could get a bogus start and finish price for the capital gains calculation as a tax avoidance measure.

You would have takeovers and all sorts of things going on. By all means let us close that down. In our submission, we are putting forward what we think are reasonable proposals to recognise the shift in paradigm to growth companies away from the blue chips which have traditionally been the focus of our economic development. Maybe we should call them directors share ownership plans. We as an industry association and as Australians are beholden to them for the effort they put in. But, for this one, you have to have a report in a form approved by the commissioner, given by a person who is qualified; and the qualified person has to be a company auditor. Have you got any cases or examples? You want them to be able to own up to 30 per cent and to be taxed through capital profit at the time of disposal. For an employee share plan to be a qualifying plan, a particular taxpayer cannot hold more than five per cent of a company as a result of having those shares. Let us not make this provision open to them.

There is not enough blue sky for them. That is the only time they are going to realise something out of this. They are forgoing that. Mr Chairman, Secretary, honourable members and advisers, thank you for the opportunity to present to this committee today. If they can live that blue sky, we, as a nation, can create wealth going forward. They have to forgo salary and employment in a big company. The act requires a company auditor to do it, and an employee cannot be someone who can do this valuation at the start. Every venture capital backed company has an employee share scheme. With individuals, you have got half rates applying, or only half the capital profit included in their assessable income, whereas ordinary income is taxed at full rates.

The last point which we will get on to also deals with this as well. You can elect to be taxed under one way or the other, but you have a dramatically different tax result. And it may or may not work. We all have civic responsibilities. AVCAL in relation to this submission. In other words, there is no discount for the employees. Most people do not see any problem with employee share ownership in terms of the listed firms. Turning to employee share options: the Ralph reforms have given us the opportunity to move forward and to recognise this new paradigm of growth.

But I still have that concern at the back of my head. In relation to the beginning, it should not be an issue. It may or may not work. You need shareholder approval and, basically, the ASX and the institutions are not going to let a big slice of their company be given away to executives. This is all money out the door, which is unnecessary. Some of the detail necessary there will be quite important, as well, in relation to some of the venture capital stuff. We are asking you to bring that limit up to 30 per cent or get rid of it. It is very not difficult to get five per cent.

That supplementary material be accepted as a supplementary submission from Mr Andrew Green of AVCAL and from Mr Richard Taylor. We are talking about CEOs and CFOs. The tax rules were designed for listed companies and they do not take into account small growing companies at all. The other alternative is for a qualifying scheme. The last thing we want to see is people exploiting this provision to shift income into capital. Then you have the wonderful marriage of complementary skills. Just addressing the avoidance concerns, I think it is one thing to be concerned about them. It is important, as a nation, that we realise that. The question I want to put to you is this: is employee share ownership really the only mechanism that is available?

We just do not need it, especially with employee share option plans where there is no downside risk for employees. It just went over the top, the last time around. Is there a way of dealing with this five per cent rule for small and perhaps unlisted companies? Might I add there that one of the things that we want to encourage is for US pension funds and venture capital funds to team up and create strategic alliances with Australian managers, so that we can have a marriage not only of capital but of minds. Who is going to pay the extra amount and make it a bigger capital profit? We are asking that, in the shift of paradigm, there be a recognition that the gains accruing will be taxed as capital gains. As a nation, we have to fund these things.

Certainly, in relation to the end, I agree with you. Australia because we are unable to attract the sort of personnel we want because, in the qualifying scheme, they cannot own more than five per cent of the company. Every time I pick up employee share scheme provisions with some of my partners who specialise in it, we go back to the act, because we cannot remember how it works. We are all for that. So the share purchase is going to keep the price honest: that is what you are saying. There is actually an imputed profit in there, under the act, dealing with the time value of money.

It is a key issue. That is the upside. Perhaps you could give us an overview of your submission and, in particular, set out the nature of the problems you see for the venture capital industry and what sort of changes, if any, you would like to see and why that would be the case. Thank you very much for your evidence today. You are backing the employers. Who is going to pay too much for them or too little? It is quite a simple concept. The reason is that, if we are to have world best companies, we need to be able to recruit world best people from blue chip corporations like the CISCOs and the IBMs of this world.

If we are talking about avoidance, we have to identify those areas and close them down. Could you send that sort of evidence on to us? You include that in your assessable income at 48. No; we just work our guts out. We would really like the support of everyone in relation to getting them through. We are also talking about the top IT guys, or the top biotech sciences or whatever. What do we want to do? Then we will discuss it. Kerry Bartlett is the Liberal Party member for Macquarie, covering the Blue Mountains in New South Wales. Our view is that, with that 12c, we should follow the model of alternative 2, basically because there is an imputed value in these options up front, when the employee is given the options.

Anything else after that is basically from any increase in the value of the company; and we are saying that the employee should be treated in the same way as any other option holder or any other participant in the company: the profit should be treated as a capital profit and taxed as such. If we have to have an arbitrary limit, let us suggest it be moved to 30 per cent. ATO is paranoid in relation to these provisions. Not many: name one. That concludes our questions. Any value in the options is taxed as income up front.

It does not make sense. The market will always put in place a limitation for listed companies anyway. It is assumed you then sell it straight away after you have exercised it, so you make a profit. For private companies, how will you realise the profit you will make in relation to your shares unless you do listing, or if it is a venture capital backed company and they do a trade sale somewhere? It is only future growth that we are taxing as capital gains. If nothing else, I think there is a good case for that. Most employee option plans will be qualifying plans, and you can elect to be taxed up front on the value of the option at the day. To us, that is a situation which we want to see addressed.

Committee adjourned at 12. That this committee authorises publication, including publication of the proof transcript on the parliamentary database, of the evidence given before it at the public hearing this day. ITT and bioscience companies. In relation to Ralph, before I get on to this, we still need to get through the venture capital changes which were announced. Yes, if you want to. One way is basically that all of it is treated as income; under the second alternative, most of it is capital profit. In the venture capital industry, that does not make a lot of sense, because we are dealing with quite small companies. So why have a prospectus requirement on top of it? Do we want to tax the gains that employees make under employee options as ordinary income, or do we want to treat them as capital gains? It is the only way to align the interests of executives with those of the shareholders in the company. It is a whole new paradigm.

But that is not our submission. Let them work out their own valuation. The person who is going to get in and buy those shares would want to buy at the right price. There is a whole range of other characteristics that need to be in the pot as well before you can actually compare apples with apples. With listed companies, it is a pain; but usually it is not. What is to stop that happening? Does either of you have any comment on the capacity in which you appear before the committee? You have probably heard the next one already, as well. There is no other way?

Why is it there? Adopt the US model. So you are not comparing apples with apples. If you give someone an option, there is an outside risk in theory, unless you pay for the option. All of that is included in your accessible income and you pay tax at the top marginal rate. We are willing to work with the tax office.

Sure, there may be people out there who will look at trying to shift income in the big end of town. There is also an informal rule, such that the ASX, the investment managers and basically the body that the institutions belong to say that there should not be any more than five per cent. It is alignment of interest. For those pension funds overseas to get this tax free status, you have to be able to maintain that tax free status right through, through the pooling of interest in that trust. Can you present any to us at some point? As I have already stated, we are very concerned to make sure that everyone fulfils their civic responsibility to fund the nation, as we have our own need as a nation to survive. What you are talking about is not really an employee share ownership plan.

In all honesty, the listed companies are much bigger. They have a minimum tax rate of 20 per cent on everything. By way of thanks to the government and to people on both sides of politics who have been involved in the consultation processes, I would like to mention the enormous importance to Australia of getting the Ralph reforms into law. So the difference basically between the two scenarios, alternative 1 and alternative 2, under the existing provisions is a tax of 73c and a tax of 39c. But what about on disposal? The US also have a minimum tax rate of 20 per cent.

The committee prefers that all evidence be given in public but, if at any stage you want to say something of a confidential nature and give evidence in private, please indicate that that is the case, and we will consider your request. They are making the big sacrifice. It is very important to us, and I know it also is to you. You convinced me about the aims and the process, and I do not have any problem with that. It is avoidance, that is what it is. We have a valuation. Rod Sawford is our Deputy Chairman and is the Labor member for Port Adelaide in South Australia. That is the 12c.

We can provide you with anecdotal evidence of companies who have gone to the US for this reason. Why is a trust a preferred vehicle, as opposed to direct shareholding? And any value in the options that are granted at the time should be taxed as ordinary income. The whole private sector is disadvantaged by employee shares and share option plans in general. If we are paranoid, just adopt the US model. Rick, I now ask you just to run through the points in some detail.

Let us just make this a lot simpler. What you want is complex in one sense, but simple in another. If we are to be in the race, we have to have those people. That is right; you are not talking about employee share ownership. The objectives and things that you want from the point of view of the companies you are talking about, in terms of employee share ownership, are actually a bit different from some of the objectives that we are looking at in larger, publicly listed companies where we are looking at employee loyalty, productivity issues and all sorts of things. When that comes up, please bear in mind that we need some more detail in relation to those foreign pension funds to make sure they get the exemption. Just make it unlisted, if you want to. The first one is the simple one: you are taxed at the time when you exercise the option. It is certainly a problem with relation to a number of the schemes that I have been looking at. That is us, who deal with it all the time.

They think that everything should be taxed as income and should be taxed up front. There was, because basically you had people getting shares in companies they were not even working for and qualifying under employee share schemes. We consider it a privilege to have an institution which is focused on responding to the needs of the community. We are talking about quite small companies here. It is an unnecessary complication. You have got two ways in which you can be taxed under the option scheme, under the employee share scheme provisions. Do you have any concerns about the prospectus requirements for the sorts of companies that you are dealing with?

You are talking about director share ownership plans. It is designed for the big listed companies. The deliberate misleading of the committee may be regarded as a contempt of the parliament. Are there any questions on that one? This five per cent just does not have any relevance to us. It is not a matter of simply adopting the US model, is it? That is true here. There is no other way to do it. It is a calculated risk. Australians in Silicon Valley providing employment for Americans and doing what they should be doing here, but they are doing it over there. Where there is special expertise residing in the US in niche areas, we can bring that into the Australian venture capital firms so that we have got this strategic alliance. You are the executive.

Since Ralph, clearly there is a big distinction between income and capital gains, especially for individuals. This is a very good example of Australian democracy in action. Because it is not just these companies that have this enormous potential; it is also smaller companies that have succession issues and things that they want to deal with. In the first area, we ask that employees who received options as part of an employee share option arrangement be treated in the same way as ordinary option holders. The government is trying all sorts of tactics to get people off welfare. We put barriers up so other nations can race ahead of us. The Abbott government is expected to overturn the tax treatment of employee stock option schemes in favour of companies and their employees. Australia is best served when Petrie and others of his ilk receive the best possible support and environment to flourish. PoliticsNow: Jason Clare says he hopes his western Sydney electorate will respect his decision to vote Yes despite their strong No vote.

An exasperated Petrie tries to explain how his scheme works but gives up, saying it will take 30 minutes just to tackle the basics. This is also known as Online Behavioural Advertising. Natural resources will one day be depleted. More wages mean more taxable income. Instead, they pay high fees to lawyers and accountants to structure these schemes for workers. We are our own worst enemies. Ingogo secured, but his voice almost quivers in anger when the conversation turns to employee share options.