PPT Overview - Succession Plus

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ESOP

PPT Overview

Over the last 15 years, we have been using a proprietary Employee Share Ownership Plan structure designed specifically as a Business Succession and Exit Planning tool for Australian SMEs. Our structure is called a Peak Performance Trust or PPT, and the first trust we implemented for a real estate business in 2006 is still operating.

The Peak Performance Trust is an employee share trust as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA) and subsection 130-85(4), and is a special unit trust whose operation is governed by a trust deed. Employees are granted units based on predetermined qualification rules and a profit share contribution based on an agreed formula is made to allow the trust to acquire shares in the employer company. The plan is an employee share scheme within the meaning of subsection 83A-10-(1) of the ITAA. The plan also includes some specific criteria to protect the business, the founders and the employees and ensure a win-win-win outcome for all involved.

Employee Share Schemes (ESS) – Their design and the taxation implications is a specific area of expertise for our CEO and Founder, Craig West, who is currently completing a Doctor of Business Administration research thesis on using Employee Share Ownership Plans as a Business Succession and Exit Planning tool for Australian SMEs.

The taxation of Employee Share Ownership Plans is often confused by advisers and can be complicated. To review the technical aspects of the Peak performance Trust including extracts from the public Private Binding Rulings we obtain for clients, download a copy of our PPT overview and technical guide.