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  • Bonus units issued where no amount is included in assessable income
    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
    Original units acquired on or after 20 September 1985

    If your bonus units relate to other units that you acquired on or after 20 September 1985, your bonus units are taken to have been acquired on the date you acquired your original units. If you have original units that you acquired at different times, you will have to work out how many of your bonus units are taken to have been acquired at each of those times.

    The cost base and reduced cost base of the bonus units are calculated by apportioning the cost base and reduced cost base of the original units over the original units and the bonus units. Effectively, this results in a reduction of the cost base and reduced cost base of the original units. Any calls paid on partly paid bonus units are also included as part of the cost base and reduced cost base that are apportioned between the original units and the bonus units.

    Original units acquired before 20 September 1985

    The rules that apply where your original units were acquired before 20 September 1985 depend on when the bonus units were issued and whether they were partly paid or fully paid. For further details see flowchart 2 in appendix 3.

    Example – Unit trusts

    Sarah is a unit holder in the CPA Unit Trust. She bought 1,000 units on 1 September 1985 for $1 each and 1,000 units on 1 July 1996 for $2 each. On 1 March 1997, the unit trust made a one-for-one bonus unit issue to all unit holders. Sarah received 2,000 new units. She did not include any amount in her assessable income as a result.

    The 1,000 new units issued for the original units she acquired on 1 September 1985 are also treated as having been acquired on that date and are therefore not subject to CGT.

    However, the 1,000 new units issued for the original units she acquired on 1 July 1996 are subject to CGT. Their cost base is worked out by spreading the cost of the original units ($2,000) acquired on that date over both the original units and the bonus units. Each of the units therefore has a cost base of $1.

    End of example
    Last modified: 04 Mar 2016QC 27527