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Purchase of shares by instalments

Last updated 30 August 2010

If you have purchased shares over two or more instalments, you should seek advice from the ATO about your capital gains tax obligation (see also Recent share transactions at appendix 2).

If you bought shares in the Commonwealth Bank of Australia (CBA) or the first float of Telstra from the Government (through instalment receipts) and you sold them during the year, you may have to pay capital gains tax.

If you use the indexation method to calculate your capital gain, indexation of the instalments is available from the following dates:

for CBA

  • first instalment-13 July 1996
  • final instalment-14 November 1997

for Telstra

  • first instalment-15 November 1997
  • final instalment-17 November 1998

If you subscribed to the second issue of Telstra shares, this would have been after 21 September 1999 and you cannot use the indexation method for these shares.

QC16195