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  • Purchase of shares by instalments

    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

    If you purchased 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.

    Note:

    See appendix 2 for information about some of the more recent share transactions.

    Note: Rights or options to acquire shares or units

    If you hold shares or units, you may be issued rights or options to acquire additional shares or units at a specified price.

    If the rights and options are offered at no cost, you are taken to have acquired them at the same time as you acquired the original shares or units. Therefore, if you acquired the original shares or units before 20 September 1985, any capital gain or capital loss you make from the sale of the rights or options is disregarded.

    If you acquired your original shares or units (or rights or options from another entity) on or after 20 September 1985, they are treated much like any other CGT asset and are subject to capital gains tax. This is also the case if you paid the company or fund an amount for them.

    Last modified: 06 Oct 2009QC 16182