Staff Share Issue Held Tax Free

Press, Volume CVI, Issue 31349, 20 April 1967, Page 3

Staff Share Issue Held Tax Free

(New Zealand Preet Association)

WELLINGTON, April 19.

The difference between the cost of an issue of shares by a company to its staff and the market value of the shares was not assessable income by the recipients for tax purposes, Mr Justice McGregor held in a judgment delivered in the Supreme Court today.

In a case stated under the Land and Income Tax Act, his Honour found in favour of Fred St. John Parson, a buyer, of Wellington, against the Commissioner of Inland Bevenue.

The objector was an employee of Woolworths (N.Z.), Ltd., his Honour said. In 1961 the parent company in Australia decided to make a staff issue of shares to senior employees of the New Zealand company.

An offer was made to certain employees of a certain number of 5s ordinary shares at a premium of ss.

The objector purchased a number of the shares. The difference between the price paid by the objector for the shares and their market value was £402, which the commissioner contended was assessable income. His Honour held that the commissioner was incorrect in including the sum in the assessment as being salary, wages or allowances received or receivable by way of bonus, gratuity, extra salary or emolument of any kind in relation to the employment of the taxpayer.