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 1/2)
Character Range: 449916–452705

3                                                             You *acquire the original equities before 20 September 1985 and the bonus equities are fully paid                                  You *acquired the original equities                       Any *capital gain or *capital loss you make from the bonus equities is disregarded

  The amount paid or payable can include giving property: see section 103‑5.

Note 1: The amounts of calls you pay on partly‑paid equities will also form part of the first element of their cost base and reduced cost base.

Note 2: There is a special rule for bonus equities issued on or before 1 pm on 10 December 1986 that affects item 2 of the table: see subsection 130‑20(3) of the Income Tax (Transitional Provisions) Act 1997.

Special rule for unit trusts

 (4) The modifications in this section are not made if, for the income year in which the bonus equities are issued, the unit trust is:

 (a) a corporate unit trust within the meaning of section 102J of the Income Tax Assessment Act 1936; or

 (b) a public trading trust within the meaning of section 102R of that Act.

Note: Subsection 26BC(9E) of the Income Tax Assessment Act 1936 (about securities lending arrangements) modifies the operation of this section.

Subdivision 130‑B—Rights

Table of sections

130‑40 Exercise of rights
130‑45 Timing rules
130‑50 Application to options

130‑40  Exercise of rights

 (1) The table in this section sets out the modifications to the rules about *cost base and *reduced cost base that happen if you exercise rights to *acquire:

 (a) *shares, or options to acquire shares, in a company; or

 (b) units, or options to acquire units, in a unit trust.

Note: The exercise of rights acquired under an employee share scheme are dealt with in Subdivision 130‑D.

 (2) The modifications happen only if:

 (a) you did not pay for the rights and the condition in subsection (3) is satisfied; or

 (b) the condition in subsection (4) is satisfied.

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

 (3) When you were issued the rights, you must:

 (a) already own shares in, or *convertible notes issued by, the company or a company that is a member of the same *wholly‑owned group (the original shares or notes); or

 (b) already own units in, or convertible notes issued by the trustee of, the unit trust (the original units or notes).

 (4) You must have *acquired the rights from an entity that already owned shares, units or convertible notes of the kind referred to in subsection (3).

 (5) The company that is a member of the same *wholly‑owned group mentioned in paragraph (3)(a) includes a company that would cease to be a member of that group by the exercise of the rights.

 (6) The rights to *acquire units