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Appendix 3-Flowcharts

Last updated 5 October 2009

This appendix contains four flowcharts, see AppendixesThis link will download a file (PDF, 306KB).

Flowchart 1: Treatment of bonus shares issued on or after 20 September 1985

Flowchart 2: Treatment of bonus units issued on or after 20 September 1985

Flowchart 3: Treatment of rights or options to acquire shares or units issued directly to you from a company or trust for no payment

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

Flowchart 1: Treatment of bonus shares issued on or after 20 September 1985

  1. Did you acquire the original shares on or after 20 September 1985?

Yes

Read on from question 2

No

Read on from question 4

  1. Is any part of the bonus shares a dividend or treated as a dividend?

Yes

Read on from question 3

No

Read answer 1

  1. Were the bonus shares issued before 1 July 1987?

Yes

Read answer 1

No

Read answer 2

  1. Is any part of the bonus shares a dividend or treated as a dividend?

Yes

Read on from question 5

No

Read on from question 6

  1. Were the bonus shares issued before 1 July 1987?

Yes

Read on from question 6

No

Read answer 3

  1. Are the bonus shares partly paid?

Yes

Read on from question 7

No

Read answer 4

  1. Were the bonus shares issued before 10 December 1986?

Yes

Read answer 4

No

Read on from question 8

  1. Before the sale of the bonus shares, were any further call payments made to the company?

Yes

Read answer 5

No

Read answer 4

Answer 1

  1. The bonus shares are subject to capital gains tax.
  2. The bonus shares are acquired when the original shares were acquired.
  3. The cost base of each original and bonus share is equal to:  
    • the cost of the original shares divided by the total number of original and bonus shares, plus
    • any calls on partly paid bonus shares.
     

Answer 2

  1. The bonus shares are subject to capital gains tax.
  2. The acquisition date of the bonus shares is their date of issue.
  3. The cost base includes the amount of the dividend plus any calls on partly paid bonus shares.

Answer 3

  1. The bonus shares are subject to capital gains tax if issued on or after 20 September 1985.
  2. The acquisition date of the bonus shares is their date of issue.
  3. The cost base includes the amount of the dividend, plus any calls on partly paid bonus shares.

Answer 4

The acquisition date of the bonus shares is before 20 September 1985.

The bonus shares are not subject to capital gains tax.

Answer 5

  1. The bonus shares are subject to capital gains tax.
  2. The acquisition date of the bonus shares is the date when the liability to pay the first call arises.
  3. The cost base is the market value of the bonus shares just before the liability to pay the first call arises, plus the amount of call payments made.

Flowchart 2: Treatment of bonus units issued on or after 20 September 1985

  1. Did you acquire the original units on or after 20 September 1985?

Yes

Read on from question 2

No

Read on from question 3

  1. Is any part of the bonus units included in your assessable income?

Yes

Read answer 1

No

Read answer 2

  1. Is any part of the bonus units included in your assessable income?

Yes

Read on from question 4

No

Read on from question 5

  1. Were the bonus units issued on or after 20 September 1985?

Yes

Read answer 1

No

Read answer 3

  1. Are the bonus units partly paid?

Yes

Read on from question 6

No

Read answer 3

  1. Were the bonus units issued before 10 December 1986?

Yes

Read answer 3

No

Read on from question 7

  1. Before the sale of the bonus units were any further call payments made to the trust?

Yes

Read answer 4

No

Read answer 3

Answer 1

  1. The bonus units are subject to capital gains tax.
  2. The acquisition date of the bonus units is their date of issue.
  3. The cost base includes the amount included in assessable income, plus any calls on partly paid bonus units.

Answer 2

  1. The bonus units are subject to capital gains tax.
  2. The bonus units are acquired when the original units were acquired.
  3. The cost base of each original and bonus unit is equal to:  
    • the cost of the original units divided by the total number of original and bonus units, plus
    • any calls on partly paid bonus units.
     

Answer 3

The acquisition date of the bonus units is before 20 September 1985.

The bonus units are not subject to capital gains tax.

Answer 4

  1. The bonus units are subject to capital gains tax.
  2. The acquisition date of the bonus units is the date when the liability to pay the first call arises.
  3. The cost base is the market value of the bonus units just before the liability to pay the first call arises, plus the amount of call payments made.

Flowchart 3: Treatment of rights or options to acquire shares or units issued directly to you from a company or trust for no payment

  1. Did you acquire the original shares or units before 20 September 1985?

Yes

Read question 2

No

The acquisition date of the rights or options is the date of acquisition of the original shares or units.

Read question 3

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

Yes

Read answer 1

No

Read answer 2

  1. Did you exercise the rights or options?

Yes

Read answer 3

No

Read question 4

  1. Did you sell the rights or options or did they expire?

Yes

Read answer 4

Answer 1

  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 2

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

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 the exercise.
  3. The cost base is the 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

If the capital proceeds on the sale or expiry of the rights or options are more than their cost base, you make a capital gain.

You cannot make a capital loss because the rights or options cost nothing.

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

  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 before 20 September 1985?

Yes

Read answer 2

No

Read answer 3

  1. Did you exercise the rights or options?

Yes

Read answer 4

No

Read question 5

  1. Did you sell the rights or options or did they expire?

Yes

Read answer 5

Answer 1

Any capital gain or loss on the sale or expiry of he 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 them 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 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.

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