Flowchart 3: Treatment of rights or options to acquire shares or units issued directly to you from a company or trust for no payment

Warning:

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

End of attention

1. Did you acquire the original shares or units before 20 September 1985?

66. Did you exercise the rights or options on or after 20 September 1985?

67. Did you exercise the rights or options?

68. Did you sell the rights or options or did they expire?

Answer 1

1. The shares or units acquired on exercise of the rights or options are subject to capital gains tax.
2. The acquisition date of the shares or units is the date of exercise of the rights or options.
3. The first element of the cost base of the shares or units includes:
   • the market value of the rights or options when they were exercised, plus
   • any amount you paid to exercise the rights or options.
    

Note: Any capital gain or loss you make from exercising the rights or options is disregarded.

Answer 2

Any capital gain or loss on the sale or expiry of the rights or options is disregarded.

Answer 3

1. The shares or units acquired on exercise of the rights or options are subject to capital gains tax.
2. The acquisition date of the shares or units is the date of the exercise.
3. The cost base is the amount you paid to exercise the rights or options.

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.

You cannot make a capital loss because the rights or options cost nothing.