• Conversion of notes to units

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    Special rules also apply to convertible notes issued by a unit trust after 28 January 1988 and before 11 May 1989. Any capital gain or loss made on their conversion to units in the unit trust is disregarded. Their cost base for future capital gains tax purposes includes both the cost of the convertible note and any further amount payable on the conversion.

    Where convertible notes were issued prior to 28 January 1988 and later converted into units, the cost base of the units received should include any amount payable on conversion plus the market value of the note at the time of conversion. A capital gain or loss may arise on conversion of the note - with the exception of notes acquired before 20 September 1985 - depending on the amount of capital proceeds received. The amount of capital proceeds is the value of the units received.

    Last modified: 18 Sep 2009QC 18323