• Flowchart 4: Treatment of rights or options to acquire shares or units that you paid to acquire either directly from a company or trust or from another person

    Attention

    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 rights or options before 20 September 1985?

    Yes

    Read question 2

    No

    Read question 4

    1. Did you exercise the rights or options?

    Yes

    Read question 3

    No

    Read answer 1

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

    Yes

    Read answer 3

    No

    Read answer 2

    1. Did you exercise the rights or options?

    Yes

    Read answer 4

    No

    Read answer 5

    Answer 1

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

    Answer 2

    Any capital gain or loss on the shares or units acquired from the exercise of the rights or options is disregarded because the shares or units are acquired before 20 September 1985.

    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 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 4

    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 of the rights or options.
    3. The cost base of the shares or units includes the amount you paid for the rights or options, plus any amount you paid to exercise them.

    Note:

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

    Answer 5

    You may make a capital gain or loss on sale or expiry of the rights or options. This depends on the amount of capital proceeds received.

    Last modified: 04 Mar 2016QC 27527