A CGT event happened when your TNCL shares were cancelled. You may have made a capital gain or loss from this CGT event happening, depending on the cost base (or reduced cost base) of the shares. The tax consequences are different depending on when you acquired your TNCL shares.
Shares acquired before 20 September 1985
If you acquired your shares in TNCL before 20 September 1985, any capital gain or loss you make from the cancellation will be disregarded. You will not be able to apply scrip for scrip rollover.
The cost base and reduced cost base of each of the NC CDIs (or shares) that you acquired in the reincorporation is their market value at the time of the reincorporation. For a voting CDI the market value is $23.28. For a non-voting CDI the market value is $22.61.
Shares acquired after 19 September 1985
For ordinary shares that you acquired after 19 September 1985, work out if you have made a capital gain or capital loss using the capital proceeds of $11.64 ($23.28/2) you received for each TNCL share.
The following table will help you.
For each TNCL ordinary share with a: |
you have made: |
equal to: |
cost base* of less than $11.64 |
a capital gain |
$11.64 minus the cost base of the share |
reduced cost base* of more than $11.64 |
a capital loss |
the reduced cost base of the share minus $11.64 |
* For information on how to work out the cost base and reduced cost base for shares, see the Guide to capital gains tax.
For preference shares that you acquired after 19 September 1985, work out if you have made a capital gain or capital loss using the capital proceeds of $11.305 ($22.61/2) you received for each TNCL share.
The following table will help you.
For each TNCL preference share with a: |
you have made: |
equal to: |
cost base* of less than $11.305 |
a capital gain |
$11.305 minus the cost base of the share |
reduced cost base* of more than $11.305 |
a capital loss |
the reduced cost base of the share minus $11.305 |
* For information on how to work out the cost base and reduced cost base for shares, see the Guide to capital gains tax.
If you made a capital gain on the cancellation of your post-CGT TNCL shares, you may choose to apply scrip for scrip rollover to disregard the capital gain.
If rollover does not apply
If you made a capital gain on the cancellation of your TNCL shares, you must include it in your calculations when completing item 17 on your 2004-05 tax return (supplementary section).
The method you use to work out any capital gain depends on when you acquired those shares. The following table sets out what method you can use.
If you acquired your TNCL shares: |
You calculate your capital gain using the: |
Before 21 September 1999 |
indexation method* or discount method Note: if you have capital losses to apply against capital gains you made on shares acquired before 21 September 1999, you may want to use the indexation method for some of your shares and the discount method for the others. (For more information, see example of Clare in chapter 2 of the Guide to capital gains tax) |
After 21 September 1999 and before 12 November 2003 |
discount method Note: If you have capital losses to apply against capital gains you made on these shares, you deduct the capital losses before applying the discount |
On or after 12 November 2003 |
other method |
* If you choose to index the cost base of shares you acquired before 21 September 1999, you cannot apply the CGT discount when you dispose of them.
For information on the different methods you can use to work out your capital gain, see the Guide to capital gains tax.
If you made a capital loss you can offset this loss against other capital gains you made in the 2004-05 income year. If you are unable to offset all the capital loss, you can carry the balance forward to offset against future capital gains.
If you choose rollover
Rollover allows you to disregard a capital gain made from the cancellation of your TNCL shares. Rollover does not apply to a capital loss or to shares that were acquired before 20 September 1985.
Note: If you apply scrip for scrip rollover, the cost base of your NC CDIs will be lower than if you declare the capital gain on this transaction.
What are the capital gains tax consequences for the NC CDIs (or shares) acquired under the reincorporation?
All of the NC CDIs (or shares) acquired in this reincorporation may be subject to capital gains tax when a CGT event (such as being sold or given away) happens to them. The following information will help you to calculate the cost base of the NC CDIs (or shares) that you acquired in this arrangement.
Acquisition cost calculations
The cost base of an asset is made up of several elements, including its acquisition cost. Generally, where you exchange shares in one company for shares in another, the acquisition cost of the shares in the second company is the market value of the shares in the first company at the time of the exchange. However, special rules apply where rollover is chosen - see the table below.
Availability of indexation and CGT discount
Generally you can only use the CGT discount method or the indexation method to calculate your capital gain where you have held the asset for more than 12 months. However, special rules apply where the rollover is chosen - see the table below.
Application to NC CDIs (or shares) acquired under this merger
The following table summarises the acquisition cost of NC CDIs (or shares), and the availability of indexation and the CGT discount, where NC CDIs (or shares) are received in exchange for TNCL shares.
Then NC CDIs (or shares) have: |
If TNCL shares were acquired: |
||
Pre-CGT (no rollover is allowed) |
Post-CGT |
||
|
|
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Acquisition cost of: |
$23.28 per voting CDI (share) $22.61 per non-voting CDI (share) |
$23.28 per voting CDI (share) $22.61 per non-voting CDI (share) |
Cost base of the TNCL shares exchanged for NC CDIs (shares) # |
Discount available after: |
12 November 2005 |
12 November 2005 |
12 months from the date of acquisition of the TNCL shares |
Indexation is: |
Not allowed |
Not allowed |
Allowed * |
# Calculated as at the date of the reincorporation - 12 November 2004
* Provided that the TNCL shares were acquired before 21 September 1999
Note: If you choose to index the cost base of TNCL shares you acquired before 21 September 1999, you cannot apply the CGT discount to reduce any capital gain that you make on the disposal of the NC CDIs (or shares) that you acquire in exchange for them.