New Business Tax System (Taxation of Financial Arrangements) Act (No. 1) 2003 (133 of 2003)

Conversion of a convertible interest

Item

In this situation:

The modification is...

1

You *acquire *shares or units in a unit trust by converting a *convertible interest that is a *traditional security.

The first element of the *cost base of the shares or units is the sum of:

(a) the cost base of the convertible interest at the time of conversion; and

(b) any amount paid to convert the convertible interest, except to the extent that the amount is represented in the paragraph (a) amount; and

(c) all the amounts to be added under subsection (1A).

The first element of their *reduced cost base is worked out similarly.

2

You *acquire *shares (except shares acquired under an *employee share scheme) by converting a *convertible interest that is not a *traditional security.

The first element of the *cost base of the shares is the sum of:

(a) the cost base of the convertible interest at the time of conversion; and

(b) any amount paid to convert the convertible interest, except to the extent that the amount is represented in the paragraph (a) amount; and

(c) all the amounts to be added under subsection (1A).

The first element of their *reduced cost base is worked out similarly.

3

You *acquire units in a unit trust by converting a *convertible interest (except one that is a *traditional security) that was issued by the trustee of the unit trust after 28 January 1988.

The first element of the *cost base of the units is the sum of:

(a) the cost base of the convertible interest at the time of conversion; and

(b) any amount paid to convert the convertible interest, except to the extent that the amount is represented in the paragraph (a) amount; and

(c) all the amounts to be added under subsection (1A).

The first element of their *reduced cost base is worked out similarly.