Income Tax Act 2007 section 358

Attribution: bonus shares

Section 358 deals with how community investment tax relief (CITR) attributed to original shares is redistributed when an investor receives corresponding bonus shares in respect of those shares.

• When an investor receives bonus shares that are in the same company, same class, and carry the same rights as the original shares, the CITR attributed to the original shares is spread proportionately across both the original and bonus shares.
• The rule only applies where the investor has been the sole beneficial owner of the original shares continuously from the date they were issued until the bonus shares are issued.
• After the bonus shares are issued, the legislation treats them as if they had been part of the original share issue and had been held by the investor from that original date.
• Only "corresponding bonus shares" qualify — these must be issued by the same company, belong to the same class, and carry the same rights as the original shares in the investment.