What this ruling covers
The Australian Taxation Office has issued Class Ruling CR 2026/55 regarding Future Generation Global Limited's Dividend Substitution Share Plan (DSSP). The ruling applies from 1 July 2026 to 30 June 2031.
Tax treatment of bonus shares
The ruling confirms that Australian resident shareholders who choose to receive bonus shares instead of cash dividends under the DSSP are not taxed on those bonus shares as dividends.
Cost base
The cost base of the original shares is spread across both the original shares and the new bonus shares on a pro rata basis. The bonus shares are not separately assessed as income at the time they are received.
Capital gains tax acquisition date
Bonus shares received under the DSSP take on the same acquisition date as the original shares for capital gains tax purposes.
Conditions stated in the ruling
The ruling applies only to shareholders who:
- are Australian residents, and
- hold their Future Generation Global Limited shares on capital account - not as trading stock or revenue assets.
Franking credits and deductions
Bonus shares received under the DSSP carry no franking credits. A deduction under section 115-280 of the ITAA 1997 cannot be claimed in relation to those bonus shares.
Key actions
- Confirm that shares in Future Generation Global Limited are held on capital account and that the shareholder is an Australian resident - the ruling's protections apply only in those circumstances.
- Recalculate the cost base for both original Future Generation Global Limited shares and any bonus shares received under the DSSP on a pro rata basis, using the original shares' cost base spread across both parcels.
- Note that no franking credits apply and no deduction under section 115-280 of the ITAA 1997 is available in relation to bonus shares received under the DSSP.
- Read the full ruling at ato.gov.au - CR 2026/55.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.