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Taxation Determination

TD 93/78

Income tax: capital gains: under what circumstances will Divisions 10 and 11 of Part IIIA of the Income Tax Assessment Act 1936 apply to options or rights to acquire shares issued by a company to an existing shareholder?

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FOI status:

may be releasedFOI number: I 1214816

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).

1. Divisions 10 and 11 of Part IIIA will apply to options or rights issued to a shareholder in respect of that shareholder's existing shares in the issuing company ie. Divisions 10 and 11 will only apply when options or rights are issued pro-rata to all existing shareholders in that particular class of shares.

2. Divisions 10 and 11 of Part IIIA will not apply to options or rights issued other than in respect of existing shares in the issuing company.

Example:

X,Y and Z hold shares of the same class in G Ltd.
A placement of options is made by G Ltd to Y as a gift. X and Z are not offered any options.
The options issued to Y are not issued to Y in respect of Y's existing shares in G Ltd. Accordingly, Division 11 will not apply to the options issued to Y.

Commissioner of Taxation
6/5/93

Previously issued as Draft TD 93/D63

References

ATO references:
NO AUD BRIS CBD (CGTDET46)

ISSN 1038 - 8982

Related Rulings/Determinations:

TD 93/80

Subject References:
options;
rights

Legislative References:
ITAA Part IIIA Divisions 10 &
11

TD 93/78 history
  Date: Version: Change:
You are here 6 May 1993 Original ruling  
  5 April 2017 Withdrawn  

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