Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_3
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 3
Character Range: 453856–455918

3                                    You exercise rights issued to you to *acquire the *shares, units or options, and you acquired the original shares or notes, or the original units or notes, before 20 September 1985  The first element of your *cost base and *reduced cost base for the shares, units or options is the market value of the rights (when they were exercised) plus any amount you paid to exercise the rights.

  The payment can include giving property: see section 103‑5.

 (7) A *capital gain or *capital loss you make from the exercise of the rights is disregarded.

Note 1: The exercise of the rights would be an example of CGT event C2 (about a CGT asset ending).

Note 2: There are transitional rules for some rights: see section 130‑40 of the Income Tax (Transitional Provisions) Act 1997.

Note 3: The effect of this Subdivision is modified in 2 cases by sections 102AAZBA (about non‑resident trusts) and 414 (about CFC's) of the Income Tax Assessment Act 1936.

130‑45  Timing rules

Acquisition of rights

 (1) If you *acquired the rights from the company or trustee, you are taken to have acquired the rights when you acquired the original shares or notes or the original units or notes.

Acquisition of shares, units or options on exercise of rights

 (2) You are taken to have *acquired the new *shares, units or options when you exercise the rights.

130‑50  Application to options

  This Subdivision applies to options in the same way that it applies to rights.

Subdivision 130‑C—Convertible notes

130‑60  Shares or units acquired by converting a convertible note

 (1) This table sets out the modification to the rules about *cost base and *reduced cost base that happens if you *acquire *shares, or units in a unit trust, by converting a *convertible note.

Conversion of a convertible note
Item                              In this situation:                                                                                                                                                  The modification is: