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Convertible interests

Last updated 3 March 2016

Convertible notes

A convertible note (which is one type of convertible interest) is another type of investment you can make in a company or unit trust. A convertible note earns interest on the amount you pay to acquire the note until the note's expiry date. On expiry of the note, you can either ask for the return of the money paid or convert that amount to acquire new shares or units.

Convertible notes you acquired after 10 May 1989 will generally not be subject to CGT if you sold or disposed of them before they were converted into shares. Instead, any gain you make is included on your tax return as ordinary income and any loss you make is included as a deduction. For more information, get the publication You and your shares.

If you have sold or disposed of a convertible note that you acquired before 11 May 1989, please phone the Business Tax Infoline on 13 28 66.

When you phone, make sure you know the date you acquired the convertible note as this may affect the tax treatment.