Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-30 - SUPERANNUATION  

Division 295 - Taxation of superannuation entities  

Subdivision 295-B - Modifications of the Income Tax Assessment Act 1997 for 30 June 1988 assets  

SECTION 295-100   Exercise of rights  

295-100(1)    
Despite section 130-40 of the Income Tax Assessment Act 1997 , the modifications in subsections (2) and (3) of this section apply if an entity exercises rights or options as mentioned in that section to acquire:

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

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

and those rights or options are 30 June 1988 assets of the entity.

295-100(2)    
The first element of the cost base of the shares, units or options is the sum of:

(a) the amount paid to exercise the rights or options; and

(b) the greater of the market value of the rights or options (at the end of 30 June 1988) and the cost base of the rights or options (on that day).

295-100(3)    
The first element of the reduced cost base of the shares, units or options is the sum of:

(a) the amount paid to exercise the rights or options; and

(b) the lesser of the market value of the rights or options (at the end of 30 June 1988) and the cost base of the rights or options (on that day).

295-100(4)    
The payment referred to in subsection (2) or (3) can include giving property. To the extent that the payment does, use the market value of the property in working out the amount of the payment.

295-100(5)    
For indexation purposes, the amount referred to in paragraph (2)(b) is taken to have been incurred on 30 June 1988.