options and tax, page-3

Timzed

if you exercise options into fully paid shares the cost base of the shares for capital gains purposes is the original cost of the option plus the cost of execising the option.

The purchase date of the fully paid shares is the date the options are exercised NOT the date of purchase of the options.

Regardless of how long the options were held for proir to exercising the fully faid shares must be held for 12 months form the execise date to be eligible for the 50% capital gains discount.

This is something that needs to be considered carefully when deciding to exercise options, as it maybe better to sell the options at market instead.