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There can be non-assessable payments in relation to both shares and units.
- Non-assessable payments from a company to a shareholder
Non-assessable payments to shareholders are sometimes called a return of capital and are not very common (although companies such as Coca-Cola, BHP and Amcor have made non-assessable payments-see appendix 2). If you received a payment from a company in respect of your shares and it was not a dividend, you deduct the amount of the payment from both the cost base and the reduced cost base of your shares.
If the non-assessable payment is greater than the cost base of your shares, you include the excess as a capital gain. If you use the indexation method to work out the amount of this capital gain you cannot use the discount method to work out a capital gain when you later sell the shares or units.
- Non-assessable payments from a managed fund to a unit holder
The treatment of these payments is similar to non-assessable payments from a company to a shareholder. For more information, see chapter C2.
Last modified: 06 Oct 2009QC 27431