A Transfer of shares is typically referred to as an off-market transfer

This means the shares were not sold via a listed exchange

Transfers typically happen when an investor is wanting to move shares into another holding for example from an individual name to a company where the ownership remains the same

The exercise price is the price at which an underlying security can be purchased when trading an option, respectively. It is also referred to as the strike price and is known when an investor initiates the trade.

A sale is when someone sells their securities for a profit or loss

A trust unit redemption is when the par value is paid back to the purchaser/owner of the units. Par Value is the apparent worth or face value of the unit.

An cancellation/lapse/forfeiture is when awards can no longer met their vesting conditions

Forfeitures usually occur when the vesting targets are not met, for time based vesting this would mean when an employee leaves a company. For performance based vesting this would mean performance targets were not met

It means the employee will no longer be able to receive shares from the awards that have Forfeited

Cancelled displays the total number of awards that have been cancelled/lapsed/forfeited.

Restricted means the total number of awards that are still in plan and are not available for trading

Unvested means the total number of awards that have not yet met their vesting conditions

An exercise is when an equity holder wishes to convert a options or rights into the underlying security, usually shares.

For Employee Share Ownership Plan purposes an exercise typically occurs when a right or an option is converted into shares

Exercised displays the total number of awards (usually rights or options) that have been converted into the underlying security

Vested means the total number of awards that have met vesting conditions but have not yet been exercised

Vesting conditions are the conditions attached to your employee awards that must be met before you can transact on your awards (exercise, transfer or sell).

Vesting is ESOP jargon for when options/rights/share are no longer at real risk of forfeiture meaning you the employee have passed the time and/or performance condition attached to the awards, usually the options/rights turn into shares (sometimes you have to exercise them) and the shares are no longer restricted (some plans may have further restrictions to achieve greater tax benefits and/or to satisfy shareholders).

This is when the employees receive awards.

A beneficial interest is the right to receive benefits on assets held by another party and is often evident in matters concerning trusts.

Most beneficial interest arrangements are in the form of trust accounts, where an individual, the beneficiary receives income from the trust's holdings but does not own the account.

If you acquire an ESS interest that is a share under the start-up concession, the cost base of that share is the market value of the share when you acquired it

For an ESS interest that is taxed upfront, the interest is taken to have been acquired for its market value on the date of acquisition.

For an ESS interest for which tax is deferred, the ESS interest (and the share or right that it forms part of) is taken to have been re-acquired immediately after the deferred taxing point. This resets the cost base of the ESS interest to its market value at this time, and resets the acquisition date, which will be relevant to your eligibility for the 50% CGT discount.

Capital gains tax (CGT) is the tax you pay on profits from selling assets, such as property.

You report capital gains and capital losses in your income tax return and pay tax on your capital gains. Although it is referred to as 'capital gains tax,' it is part of your income tax. It is not a separate tax.

If you have a capital gain, it will increase the tax you need to pay. You may want to work out how much tax you will owe and set aside funds to cover it.

A dividend or distribution is a portion of a company's profit that it decides to pay out to shareholders, in return for their investment.

The trustee(s) (there may be more than one) of a trust may be a person or a company (the latter is known as a corporate trustee). In either case, the trustee must be legally capable of holding trust property in their own right. The trustee holds the trust property for the benefit of the beneficiaries.

A trust is an obligation imposed on a person or other entity to hold property for the benefit of beneficiaries. While in legal terms a trust is a relationship not a legal entity, trusts are treated as taxpayer entities for the purposes of tax administration.

The trustee is responsible for managing the trust's tax affairs, including registering the trust in the tax system, lodging trust tax returns and paying some tax liabilities.

Beneficiaries (except some minors and non-residents) include their share of the trust's net income as income in their own tax returns. There are special rules for some types of trust including family trusts, deceased estates and super funds.

Franking credits arise for shareholders when certain Australian-resident companies pay income tax on their taxable income and distribute their after-tax profits by way of franked dividends. These franked dividends have franking credits attached. Franked dividends are received either directly as a shareholder or indirectly as a beneficiary of a trust.

A tax-deferred scheme allows an employee to defer paying tax in relation to their employee share schemes (ESS) interests until the income year in which the deferred taxing point occurs, instead of paying tax in the year the interests are acquired. To be able to defer tax, both the scheme and the employee must meet the general conditions as well as the specific conditions for each type of tax-deferred scheme.

If you acquire ESS interests under this scheme, you may be entitled to reduce the discount amount that must be included in your assessable income by up to $1,000.

To be entitled to the concession, you will need to meet:

• the ownership and voting rights test
• an income test (your taxable income after adjustments must be $180,000 or less)

The Australian ESS rules treat ESS interests provided to an associate of your employee as if they were acquired by your employee, rather than their associate.

The definition of an associate is very broad and depends on what type of entity the shareholder is.

For an individual shareholder, an associate includes:

• a relative of the individual
• a partner of the individual or a partnership in which the individual is a partner
• the spouse or child of an individual partner
• a trustee of a trust under which the individual or an associate benefits
• a company under the control of the individual or associate.

For a company shareholder, an associate includes:

• a partner of the company or a partnership in which the company is a partner
• a trustee of a trust under which the company or associate benefits
• another individual or associate who controls the company
• another company that is under the control of the company or the company's associate.

For a trustee shareholder, an associate includes an entity or associate of the entity that benefits or is capable of benefiting under the trust.

For a partnership shareholder, an associate includes each partner of the partnership or their associates.

Employee Share Scheme Tax, is the tax you pay on your employee awards

There are several different type of plans in Australia and this will impact when you pay tax

If you have a tax event and you are an Australian employee, your employer is obligated to provide you with an ESS Tax Statement by the 14th of July for the previous financial year

The ESS Tax Statement will display the taxable amounts on your employee awards

A shareholders' agreement, also called a stockholders' agreement, is an arrangement among shareholders that describes how a company should be operated and outlines shareholders' rights and obligations. The agreement also includes information on the management of the company and privileges and protection of shareholders.

A Company Constitution documents a company's management rules. This document creates a contract between the company, its members, its directors, and the company secretary. A Company Constitution is a convenient resource for members or shareholders looking to review all internal management rules.

The Corporations Act 2001 (Cth) (the Corporations Act, or CA 2001) is an Act of the Commonwealth of Australia which sets out the laws dealing with business entities in Australia at federal and interstate level. It deals primarily with companies but also with other entities, such as partnerships and managed investment schemes. The Act is the primary basis of Australian corporations law.

In relation to a company, means the total of ordinary and any preference shares issued by the company but does not include convertible debt securities

ASIC stands for Australian Securities and Investments Commission

ASIC is Australia's integrated corporate, markets, financial services and consumer credit regulator.

ASIC is an independent Australian Government body. We are set up under and administer the Australian Securities and Investments Commission Act 2001 (ASIC Act), and we carry out most of our work under the Corporations Act.

IPO Stands for Initial Public Offering.

This is the first time a company lists on a stock exchange, this makes their shares available to the entire market for purchase.

Unlisted means the company is not traded on a stock exchange.

A black out is when employees are not allowed to trade their shares, this may be because employees have access to information that the rest of the market doesn't.

The term "security" refers to a fungible, negotiable financial instrument that holds some type of monetary value. A security can represent ownership in a corporation in the form of stock, a creditor relationship with a governmental body or a corporation represented by owning that entity's bond; or rights to ownership as represented by an option.

Some Employee Share Plans offer a Salary Sacrifice option of acquiring Awards

Salary sacrificing is also known as salary packaging or total remuneration packaging. You and your employer agree for you to receive less income before tax and in return your employer pays for certain benefits of similar value for you.

This means you pay less tax on your income.

A salary sacrifice arrangement reduces your taxable income, meaning you may pay less tax on your income.

We don't provide advice on entering or rejecting a salary sacrifice arrangement. You should seek financial advice before entering into a salary sacrifice arrangement.

An employee share plan offer, is an invitation to participant in a employee share plan.

Typically you'll receive an offer letter and a copy of the plan rules. It is important to read and understand what you are being offered and how the plan operates (plan rules)

Offers usually run for a minimum of two weeks and in most cases you will have to accept (opt-in) to the offer in order to participate in the plan.

EOT means Employee Ownership Trust, EST means Employee Share Trust

Very broadly, an ESS is a scheme designed to provide shares or rights (such as options) to acquire shares (ESS interests) in a company to employees. Those ESS interests may be held through an Employee Share Trust.

An Employee Share Trust in Australia, there only purpose is to purchase shares in the parent company for the employee share plan

Fully paid shares are shares issued for which no more money is required to be paid to the company by shareholders on the value of the shares. Fully paid shares differ from partially paid shares, in which only a portion of the market value has been received by the company.

The shares you typically buy on a stock exchange are Fully Paid Ordinary Shares, sometimes known as FPOs

Cessation or Termination typically means that an employee is no longer employed by the company

Some plans may have an ESS taxing point at cessation, the tax date will be your cessation/termination date, I.E the last day of your employment.

An award is a security (Share/Right/Option/Unit… etc) held under an employee share plan

Shares are units of equity ownership in a corporation, they represent a partial ownership of a company

Different classes of shares may have different rights attached, such as voting rights and rights to receive dividends.

ESS rights are usually a tax deferred vehicle

Typically 1 right will be equal to 1 share

If vesting conditions are met then you may entitled to exercise your rights into shares at 100% or less, depending on the vesting conditions, some vesting performance conditions may reduce the total percent of shares you receive based on results of the performance.

An Option is a security that allows you the "Option" to purchase shares in a company"

Options can have a nil exercise cost, meaning once vesting conditions are met you may be able to exercise them into shares at no cost, however most options will have an exercise cost and in most cases you will need to pay the exercise price multiplied by the number of options to receive the shares

A unit is a security that is used to represent a percentage of ownership, usually in a trust

1 unit does not necessarily equal 1 share, you should always consult your plan rules and trust deed to confirm

In Succession Plus' Unit Trust Plans, sometimes known as a "Peak Performance Trust", 1 unit is equal to 1 share

ESOP can have many different meanings

We define ESOP as Employee Share Ownership Plan, however this does not mean everyone defines it the same way.

These plans are used to reward, incentive, retain employees and align employee & investor interests.

Other definitions include:

• Employee Stock Ownership Plan
• Employee Share Options Plan
• Executive Share Options Plan
• And many more...