Acquisition of rights or options and their cost base



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A shareholder in a company or a unit holder in a unit trust is sometimes issued rights or options to acquire further shares or units in the company or trust. The rights or options allow the shareholder or unit holder to purchase the additional shares or units at a specified price.

For capital gains tax purposes, you treat a right or option you acquire on or after 20 September 1985 much like any other asset.

Rights and options are usually issued to shareholders and unit holders at no cost. If you do not pay for the right or option, it has a 'nil' acquisition cost for calculating future capital gains tax.

If you pay an amount for the issue of the right or option in an arm's length dealing, however, its acquisition cost for calculating future capital gains tax is equal to the amount you pay.

Last modified: 18 Sep 2009QC 18323