Converting options to heads does not have a CGT liability at conversion, but the CGT discount clock starts again. So if you convert your options into heads, that is not sell the options on market, and say you bought them at 2 cents on market, , then the cost base is 3.2 cents, 2c purchase price + 1.2 cents conversion price for getting heads (here ADN shares).
Say you converted 100000 options to heads (shares in ADN). If within 12 months of this conversion date you sold your heads for, say, 6.2c, your CGT liability is your tax rate * the gain of 3.0 cents on each share (i.e 6.2 cents - 3.2cents) or 100,000 shares * 3c * your tax rate (i.e $3,000 gain * your tax rate). If you sell the heads after 12 months fo 6.2 cents your CGT liability is half of that (i.e $3,000 *50% CGT discount * your tax rate, which becomes $1,500 * your tax rate). Note: using a simple example here as for me I expect the share price here to be above 6.2 cents btw.
Obviously would appear too me that management prefers people to convert than do a CR, or are saying we would like to do things a bit earlier than planned if we have the funds, but also if you intend to hold long term may be worthwhile converting now to start the CGT clock to 50% discount territory again in the now than wait to November to convert and then waiting 12 months from there for the CGT discount to kick in. But obviously, if you plan to sell options to convert remaining options to heads best wait until after 1 July to convert because any on market sales of options will incur a CGT liability (i.e gain or loss depending on what price you bought the options for on market).
Now if you are close to the CGT discount on your options and do not want to convert all your options to heads, best wait IMO. For those going to convert all options to heads, up to you if you convert now or later, but depends on whether you have the conversion funds or a share in another stock that you want to realise a CGT loss this year.
All IMO
Expand
(20min delay)