Summary Treatment of rights or options issued directly to you from a company or trust for no payment
To work out the correct treatment of your assets, work through the following questions:
Did you acquire the original shares or units before 20 September 1985?
Yes Read question 2
No The acquisition date of the rights or options is the date of acquisition of the original shares or units. Read question 3
Did you exercise the rights or options on or after 20 September 1985?
Yes Read answer 1
No Read answer 2
Did you exercise the rights or options?
Yes Read answer 3
No Read answer 4
Answer 1
The shares or units acquired on exercise of the rights or options are subject to capital gains tax.
The acquisition date of the shares or units is the date of exercise of the rights or options.
The first element of the cost base of the shares or is the sum of: the market value of the rights or options when they were exercised any amount you paid to exercise the rights or options (except to the extent that this amount is represented in that market value), and if the rights or options are exercised on or after 1 July 2001, and as a result, an amount is included in your assessable income – that amount. Note: Any capital gain or loss you make from exercising the rights or options is disregarded.
Answer 2
If you did not exercise the rights of options, you disregard any capital gain or loss on the sale or expiry of the rights or options.
If you exercised the rights or options before that date, you disregard any capital gain or capital loss you make when you dispose of the shares or units that you acquired. Answer 3
The shares or units acquired on exercise of the rights or options are subject to capital gains tax.
The acquisition date of the shares or units is the date of the exercise.
The first element of the cost base of the shares or units is the sum of: the cost base of the rights or options at the time of exercise any amount you paid to exercise the rights or options (except to the extent that this amount is represented in the cost base of the rights or options at the time of exercise), and if the rights or options are exercised on or after 1 July 2001, and as a result, an amount is included in your assessable income – that amount. Note: Any capital gain or loss you make from exercising the rights or options is disregarded.
Answer 4
If the capital proceeds on the sale or expiry of the rights or options are more than their cost base, you make a capital gain.
If the capital proceeds are less than their reduced cost base, you make a capital loss.
Treatment of rights or options that you paid to acquire either directly from a company or trust or from another person
Work through the following series of questions to find out the correct treatment of your assets:
Did you acquire the rights or options before 20 September 1985?
Yes Read question 2
No Read question 4
Did you exercise the rights or options?
Yes Read question 3
No Read answer 1
Did you exercise the rights or options on or after 20 September 1985?
Yes Read question a
No Read answer 2
a. Were the rights or options ones that were renewed or extended after 20 September 1985?
Yes Read question b
No Read answer 3
b. Were they exercised before 27 May 2005?
Yes Read answer 3
No Read answer 4
Did you exercise the rights or options?
Yes Read answer 4
No Read answer 5
Answer 1
You disregard any capital gain or loss you make on the sale or expiry of the rights or options.
Answer 2
You disregard any capital gain or loss on the shares or units acquired from the exercise of the rights or options because the shares or units are acquired before 20 September 1985.
Answer 3
The shares or units acquired on exercise of the rights or options are subject to capital gains tax.
The acquisition date of the shares or units is the date of exercise of the rights or options.
The first element of the cost base of the shares or units includes the sum of: the market value of the rights or options when they were exercised any amount you paid to exercise the rights or options (except to the extent that this amount is represented in that market value), and if the rights or options are exercised on or after 1 July 2001, and as a result, an amount is included in your assessable income – that amount. Note: Any capital gain or loss you make from exercising the rights or options is disregarded.
Answer 4
The shares or units acquired on exercise of the rights or options are subject to capital gains tax.
The acquisition date of the shares or units is the date of the exercise of the rights or options.
The cost base and reduced cost base of the shares or units is the sum of: the cost base of the rights or options at the time of exercise any amount you paid to exercise them (except to the extent that this amount is represented in the cost base of the rights or options at the time of exercise), and if the rights or options are exercised on or after 1 July 2001, and as a result, an amount is included in your assessable income – that amount. Note: Any capital gain or loss you make from exercising the rights or options is disregarded.
Answer 5
If the capital proceeds on the sale or expiry of the rights or options are more than their cost base, you make a capital gain.
If the capital proceeds are less than their reduced cost base, you make a capital loss
FDL Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
