Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_3:p1
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 1/4)
Character Range: 457057–460118

3                                 You *acquire units in a unit trust by converting a *convertible note (except one that is a *traditional security) that was issued by the trustee of the unit trust  The first element of the *cost base and *reduced cost base of the units is the sum of:

                                                                                                                                                                                                          * the amount you paid to *acquire the *convertible note; and

                                                                                                                                                                                                          * any amount you paid in relation to the conversion

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

 (2) You are taken to have *acquired the shares or units when the liability to pay for the convertible note arose.

 (3) A *capital gain or *capital loss you make from converting the convertible note is disregarded.

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

Note 2: There are transitional rules for some convertible notes: see section 130‑60 of the Income Tax (Transitional Provisions) Act 1997.

Subdivision 130‑D—Employee share schemes

Table of sections

130‑80 Share or right acquired under employee share scheme
130‑83 Qualifying shares and qualifying rights
130‑85 Share or right acquired under employee share scheme involving your associate
130‑90 Share or right acquired under an employee share trust

130‑80  Share or right acquired under employee share scheme

 (1) This section sets out what happens if you *acquire a *share or right at a discount (within the meaning of Subdivision C of Division 13A of Part III of the Income Tax Assessment Act 1936) under an *employee share scheme.

 (2) The first element of the *cost base and *reduced cost base of the *share or right is its market value (worked out under sections 139FA to 139FF of the Income Tax Assessment Act 1936) when you *acquired it.

130‑83  Qualifying shares and qualifying rights

 (1) There is an exception if:

 (a) the *share is a *qualifying share or the right is a *qualifying right; and

 (b) you do not make an election under section 139E of the Income Tax Assessment Act 1936 to include an amount in your assessable income for the income year in which you *acquired the share or right.

Note: If you do not make an election of this kind, the amount is included in your assessable income for the income year in which the cessation time occurs: for example, when restrictions on disposing of the share cease.

 (2) If *CGT event A1, E1, E2 or E5 happens in relation to the *share or right (or any *share you *acquired by exercising the right) in an arm's length transaction at the *cessation time, or within 30 days after that time, any *capital gain or *capital loss you make from the disposal is disregarded.

Note: The