There are some companies listed on the Australian Stock Exchange such as ANZ, NAB and QBE which offer an alternative to a Dividend Reinvestment Plan, called a Bonus Share Plan (BSP). A BSP allows shareholders to elect not to receive a dividend in respect of their shares but to instead receive additional fully paid shares issued as bonus shares to the equivalent value of the dividend foregone.
ATO review of each BSP
The Australian Taxation Office (ATO) reviews the BSP for each company and decides on the tax implications for shareholders.
- Where the ATO has deemed the BSP to be a dividend, you just process the transaction using the Dividend - reinvestment event.
- Where the ATO has deemed the BSP to not be a dividend, you process the transaction using the Split or Consolidation event, as per the following section
Please refer to the relevant company's website to determine whether their BSP is classified as a dividend or not.
Processing as a Split or Consolidation Event
Navigate to Fund Level > Transactions > Investment - Corporate Action > Split or Consolidation
- Create the Split or Consolidation event
- This transaction will increase the quantity of shares held in the company without any change in the total cost of the shares held.
- No cash or income will be recorded and the cost base of the new shares will be a proportion of the cost base of the original parcels of shares.