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Edited version of your private ruling
Authorisation Number: 1012108925908
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Subject: Capital gains tax - Bonus options
Question 1
Are bonus shares received under the ANZ Bonus Option Plan included in your assessable income?
Answer:
No.
Question 2
When you sell your shares is Capital gains tax (CGT) applicable
Answer:
Yes.
This ruling applies for the following period
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on
1 July 2009
Relevant facts
You own a number of Australia and New Zealand Banking Group ordinary shares (ANZ).
You acquired these shares after 20 September 1985.
You have received a number of bonus option shares.
You have not included these bonus shares in your income tax returns.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Section 102-5
Income Tax Assessment Act 1997 Section 102-20
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 130-20
Income Tax Assessment Act 1936 Section 44
Reasons for decision
Bonus shares received under the ANZ Bonus Option Plan are not included in your assessable income because they do not fall within the definition of a dividend.
Where bonus shares are issued for which no consideration is payable and without crediting any amount to the companies share capital account, no amount is considered a dividend.
Your bonus shares are not treated as a dividend because ANZ has not credited the share capital accounts in connection with the issue of those shares.
Consequently, you are treated as having acquired the bonus shares at the same time that you acquired the original shares for capital gains purposes, as this was after 20 September 1985 any subsequent sale will be subject to capital gains tax.