• Non-assessable payments

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    There can be non-assessable payments in relation to both shares and units.

    1. 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.

    1. 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