Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 130 - Investments  

Subdivision 130-A - Bonus shares and units  

SECTION 130-20   Issue of bonus shares or units  

130-20(1)    
This section modifies some of the rules in section 130-20 of the Income Tax Assessment Act 1997 if:

(a) you own shares in a company or units in a unit trust (the original equities ); and

(b) on or before the day specified in subsection (2) or (3), the company issues other shares, or the trustee issues other units, (the bonus equities ) to you because it owes an amount to you in relation to the original equities.

130-20(2)    
If the bonus equities are shares and they were issued on or before 30 June 1987:

(a) subsection 130-20(2) of the Income Tax Assessment Act 1997 does not apply to you; and

(b) you work out the cost base and reduced cost base of the bonus equities under subsection 130-20(3) of that Act regardless of whether any part of the amount owed to you by the company is a dividend.

130-20(3)    
The rule in item 2 of the table in subsection 130-20(3) of the Income Tax Assessment Act 1997 does not apply if the bonus equities were issued on or before 1 pm, by legal time in the Australian Capital Territory, on 10 December 1986 and you were required to pay or give something for them. Instead, you are taken to have acquired the bonus equities when you acquired the original equities.