Draft Taxation Determination
Income tax: capital gains: under what circumstances will Divisions 10 and 11 of Part IIIA of the Income Tax Assessment Act 1936 apply to options or rights issued by a company to an existing shareholder?
Please note that the PDF version is the authorised version of this draft ruling.This document has been finalised by TD 93/78.
FOI status:draft only - for comment
|Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.|
1. Divisions 10 and 11 of Part IIIA will apply to options or rights issued to a shareholder in respect of that shareholder's existing shares in the issuing company ie. Divisions 10 and 11 will only apply when options or rights are issued pro-rata to existing shareholders.
Example: A, B and C hold shares of the same class in G Ltd.A placement of options is made by G Ltd to B as a gift. A and C are not offered any options.The options issued to B are not issued to B in respect of B's existing shares in G Ltd. Accordingly, Division 11 will not apply to the options issued to B.
Commissioner of Taxation
18 March 1993