Ext User(John Wright)
02-02-2006, 04:21 PM
"Albert" wrote
> I've held BHP shares for 15 years and have participated in BHP's Bonus
> Share Plan (BSP) instead of taking dividends. Now it's time to sell
> some shares and I have two queries:
Tom's reply contains all the answers - I am just making it explicit here.
> 1. Should I have declared the BSP shares gained each year in my annual
> tax return and paid tax on them?
No. Bonus shares are not income, unlike those receive under a dividend share
plan.
> 2. If so, was their value the share price on the date the BSP shares
> were allocated?
N/A
> 3. How do I figure the capital gain when selling the BSP shares to work
> out the CGT?
[Thought you were asking only two questions - OK, we are in bonus territory
....]
Treat as though you bought all the shares you now have (original + bonus)
for the same total price that you paid. That simply lowers the per share
purchase cost. Date of bonus share purchased (for 12 month rule or
indexation) is deemed same as that of original shares. You pay more capital
gains tax per share on the original shares - but I am sure you are not
complaining.
> Some advice from someone who knows will help me prepare to talk to a
> tax accountant.
Do ask him for a discount, as you already know all the answers now.
> Thanks for comments,
> Albert
>
> I've held BHP shares for 15 years and have participated in BHP's Bonus
> Share Plan (BSP) instead of taking dividends. Now it's time to sell
> some shares and I have two queries:
Tom's reply contains all the answers - I am just making it explicit here.
> 1. Should I have declared the BSP shares gained each year in my annual
> tax return and paid tax on them?
No. Bonus shares are not income, unlike those receive under a dividend share
plan.
> 2. If so, was their value the share price on the date the BSP shares
> were allocated?
N/A
> 3. How do I figure the capital gain when selling the BSP shares to work
> out the CGT?
[Thought you were asking only two questions - OK, we are in bonus territory
....]
Treat as though you bought all the shares you now have (original + bonus)
for the same total price that you paid. That simply lowers the per share
purchase cost. Date of bonus share purchased (for 12 month rule or
indexation) is deemed same as that of original shares. You pay more capital
gains tax per share on the original shares - but I am sure you are not
complaining.
> Some advice from someone who knows will help me prepare to talk to a
> tax accountant.
Do ask him for a discount, as you already know all the answers now.
> Thanks for comments,
> Albert
>