Unitab - Tattersall's merger (2006) PDF worksheet

Overview

This document is for people who were Unitab Limited (Unitab) shareholders at the time of the Unitab and Tattersall's Limited (Tattersall's) merger in October 2006. Most people can use this document but there are some qualifications. See Can you use these instructions?

What happened?

As part of a 'merger of equals' between Unitab and Tattersall's, Unitab became part of Tattersall's on 12 October 2006.

Under the merger, Unitab shareholders were offered a choice of three options for the transfer of their shares to Tattersall's:

Option	Per share
	cash ($)	Tattersall's shares
All shares	-	4.33
Maximise cash	14.25	-
Fixed proportion cash	3.99	3.1176

Tax consequences

Transferring your Unitab shares to Tattersall's resulted in a capital gains tax (CGT) event happening to your Unitab shares.

This document will help you work out the CGT consequences of this event, specifically your:

• capital gain or capital loss (if any) on any cash you received
• capital gain or capital loss (if any) on any Tattersall's shares you received
• eligibility for scrip-for-scrip rollover for any Tattersall's shares you received, and
• CGT cost base for any Tattersall's shares you received.

Using the instructions and worksheet

This document contains a worksheet (downloadable PDF), instructions and terms explained. Print out the worksheet so you can complete it as you go through the instructions.

You will also need your holder statement from Tattersall's, and a calculator.

Instructions

There are four sections in the worksheet. If you chose the:

• 'maximise cash' option - complete sections 1 and 2
• 'all shares' option - complete sections 1, 3 and 4
• 'fixed proportion cash' option - complete sections 1, 2, 3 and 4.

Section 1: details of your unitab shares

If you held more than one parcel of Unitab shares before the merger, enter each parcel on the worksheet in the order you got them, oldest first.

For each parcel fill in the:

• acquisition date (column 2) (the date you got the shares)
• number of shares in the parcel (column 3), and
• cost base (just before the merger) for the parcel (column 4).

Section 2: capital gain or capital loss on cash received

In this section you work out whether you made a capital gain or capital loss as a result of receiving cash under the merger. (If you did not receive any cash, go to section 3.)

Column 5: How much cash did you receive?

You need to know out how much cash you received to work out your capital gain.

Use the following table to work out how much cash you received for each of your parcels of Unitab shares:

Option	Cash received
Maximise cash	Column 3 (number of shares)  x  $14.25
Fixed proportion cash	Column 3 (number of shares)  x  $3.99

Enter the results in column 5.

Column 6: Cost base for the cash received

The cost base for the cash you received is a percentage or proportion of the cost base of your Unitab shares, which we refer to as a relevant proportion.

Work out the relevant proportion of the cost base for each parcel, using the table below:

Option	Relevant proportion
Maximise cash	Column 4 (cost base of parcel)  x  100%
Fixed proportion cash	Column 4 (cost base of parcel)  x  26.28%

Enter the results in column 6.

Column 7: Capital gain or capital loss

Step 1: Capital gain

To work out if you made a capital gain on the cash received for your Unitab shares, take the cost base for the cash you received (column 6) from the cash amount you received (column 5). So for each parcel, work out:

• column 5 (cash amount received) - column 6 (cost base).

If the result is:

• positive, you have made a capital gain - enter the result in column 7 and go to column 8

• zero or negative, you need to work out whether you have made a capital loss - go to step 2.

Step 2: Capital loss

To work out whether you have a capital loss, take the relevant proportion of the reduced cost base of your Unitab shares from the cash amount you received (column 5).

For each parcel:

column 5 (cash amount received) - reduced cost base

If the result is:

• negative, you have made a capital loss

• zero or positive, you have neither a capital loss nor a capital gain.

Go to section 3.

Column 8: CGT discount

You can treat the capital gain as a discounted capital gainprovided that you: were an individual, complying superannuation entity or eligible trust worked out the capital gain using a cost base that had been worked out without reference to indexation at any time, and had owned your Unitab shares for at least 12 months before you disposed of them.

For each parcel, place a 'Y' in column 8 if you are eligible for the CGT discount on your capital gain, and an 'N' if you are not. This information will help you to work out your total CGT liability for the income year.

If you chose the 'maximise cash' option, you have finished the worksheet.

If you chose the 'all shares' or 'fixed proportion cash' option, go to section 3.

Section 3: capital gain or capital loss on tattersall's shares

In this section you work out whether you had a capital gain or capital loss as a result of receiving Tattersall's shares under the merger.

Column 9: Number of Tattersall's shares received

Check the holder statement you received from Tattersall's and enter the total number of Tattersall's shares you received in the 'Total' box at the bottom of column 9.

Use the following table to work out the number of Tattersall's shares you received for each parcel of Unitab shares:

Option	Number of Tattersall's shares
All shares	Column 3 (number of Unitab shares)  x  4.33
Fixed proportion cash	Column 3 (number of Unitab shares)  x  3.1176

Round each answer to a full number and enter the results in column 9.

Add up the figures in column 9 and compare your answer to the number you have in the total box (from your holder statement). If the figures do not match, adjust the rounding of individual parcels to make them add up to the number on your holder statement.

Column 10: Value of Tattersall's shares

You need to know the value of the Tattersall's shares you received because you use the amount to work out whether you made a capital gain or capital loss.

Work out the value of each of your parcels of Tattersall's shares:

column 9 (number of Tattersall's shares) x $3.59

Enter the results in column 10.

Column 11: Capital gain or capital loss

Cost base of your Tattersall's shares (relevant proportion)

To work out whether you have made a capital gain or capital loss on your Tattersall's shares, you need to know their cost base. This is a percentage or proportion of the cost base of your Unitab shares, referred to as a relevant proportion. The amount will vary, depending on the option you chose.

Work out the cost base (the relevant proportion of the Unitab cost base) for each of your Tattersall's parcels, using the table below.

Option	Relevant proportion
All shares	Column 4 (cost base of Unitab shares)  x  100%
Fixed proportion cash	Column 4 (cost base of Unitab shares)  x  73.72%

Step 1 - Capital gain

To work out if you made a capital gain on your Tattersall's shares, take the cost base you have just worked out (the relevant proportion of the cost base of your Unitab shares) from the value of your Tattersall's shares, the amount you worked out at column 10:

Column 10 (value of Tattersall's shares) - cost base of Tattersall's shares

If the result is:

• positive, you have made a capital gain, go to column 12.
• zero or negative, go to step 2.

Step 2 - Capital loss

To work out whether you have a capital loss, take the relevant proportion of the reduced cost base of your Unitab shares from the value of your Tattersall's shares.

Column 10 (value of Tattersall's shares) - reduced cost base of Tattersall's shares

If the result is:

• negative, you have made a capital loss

• zero or positive, you have made neither a capital loss nor a capital gain.

Go to section 4.

Column 12: Scrip-for-scrip rollover

You can choose scrip-for-scrip rollover for the part of your capital gain that relates to the receipt of Tattersall's shares.

If you:

choose scrip-for-scrip rollover, place a 'Y' in column 12, then go to section 4

do not choose scrip-for-scrip rollover, place a 'N' in column 12 and go to column 13.

Column 13: CGT discount

If you answered 'Y' at Column 8, you can also treat this capital gain as a discounted capital gain.

if you answered 'N' at Column 8, you cannot treat this capital gain as a discounted capital gain.

For each parcel, place a 'Y' in column 13 if you are eligible for the CGT discount on your capital gain, and an 'N' if you are not. This information will help you to work out your net capital gain or capital loss for the income year.

Section 4: cost base records of your tattersall's shares

In this section you work out the cost base records of your Tattersall's shares after the merger. Complete columns 14-16 for each parcel of Tattersall's shares you have.

Column 14: Acquisition date for CGT discount purposes

If you chose rollover	If you did not choose rollover
Copy the date from column 2 to column 14. (For the purpose of accessing the CGT discount if you later sell your Tattersall's shares, you are taken to have acquired your new Tattersall's shares on the date you acquired the corresponding Unitab shares.)	Your acquisition date is 12 October 2006, the date of the merger.

Column 15: Number of shares

Copy the number from column 9.

Column 16: Cost base

If you chose rollover	If you did not choose rollover
The relevant proportionof the cost base of your Unitab shares becomes the cost base of your Tattersall's shares. You worked this amount out before doing step1 in column 11.	The cost base of your Tattersall's shares is the value of the Tattersall's shares you received in exchange for your Unitab shares (which you worked out at column 10). Copy the amount from column 10 into column 16.

If you need to work your relevant proportion out again, use the table below.

Option	Relevant proportion
All shares	Column 4 (cost base of Unitab shares) x 100%
Fixed proportion cash	Column 4 (cost base of Unitab shares) x 73.72%

You have now finished the worksheet.

More information

Class Ruling CR 2007/33 Income tax: scrip for scrip roll-over: acquisition of Unitab Limited by Tattersall's Limited

Guide to capital gains tax (NAT 4151)

Can you use these instructions?

You can use these instructions if, at the time of the merger:

• you were an individual taxpayer who was an Australian resident for tax purposes
• you were a Unitab shareholder and your shares were transferred to Tattersall's
• you were not eligible (under Subdivision 130-D of the Income Tax Assessment Act 1997) to have any capital gain you made on the shares as a result of the merger disregarded - this is relevant only to shareholders who acquired their Unitab shares under an employee share scheme
• any gain you made on your Unitab shares was a capital gain - this means that you held your shares as an investment asset rather than:
• • as trading stock
  • as part of carrying on a business, or
   
• to make a short-term or one-off commercial gain.

Terms explained

Cost base, reduced cost base and acquisition date

Your CGT records for your Unitab shares should show you your cost base and acquisition date for each of your parcels of Unitab shares. Generally, the cost base of shares is the purchase price and any incidental costs such as transfers, stamp duties, and fees charged by consultants, accountants, lawyers or brokers.

If you have to work out a capital loss, you use reduced cost base rather than cost base. Your reduced cost base does not include indexation or certain other expenditure.

Discounted capital gain

If you work out your capital gain using the 'discount method', you reduce (or discount) it using the 'CGT discount'. The result is referred to as a 'discounted capital gain'. If you use the discount method to work out your capital gain, you do not index the cost base.

Parcel of shares

If you acquire more than one share on a particular date for a particular price, we refer to those shares as a parcel of shares. For example, you may have bought Unitab shares on two occasions on the Australian Stock Exchange (ASX) - each of these acquisitions is a separate parcel.

Although each share is a separate CGT asset, it is usually more convenient to work out the CGT consequences for each parcel of shares.

Scrip-for-scrip rollover

'Rollover' allows you to defer your CGT obligation until a later CGT event happens to your shares. You can only choose rollover if you received Tattersall's shares in exchange for your Unitab shares, made a capital gain on the exchange of your shares, and you must have acquired the shares after 20 September 1985.

Relevant proportion

When you choose scrip-for-scrip rollover, you must allocate your original cost base across your new assets on a proportional basis. We refer to each allocation as a 'relevant proportion' of your original cost base.

In the instructions for columns 6, 11 and 16 of this worksheet, we have provided percentages that help you work out the 'relevant proportion' of your original cost base.

For each option, we have worked these percentages out by expressing the relevant new asset (that is, cash or Tattersall's shares) as a proportion of the total consideration you received for a single Unitab share. This is represented generally as:

(Cash amount)  or   (value of Tattersall's shares)	x	100
Cash amount  +  value of Tattersall's shares

'Value of Tattersall's shares' means the market value (on the date of disposal) of the Tattersall's shares you received for each Unitab share.

We accept that the market value of one Tattersall's share at the time of the merger was $3.59.

'Fixed proportion cash' option

Under the 'fixed proportion cash' option, you received 3.1176 Tattersall's shares for each individual Unitab share you disposed of. So, for you, the value of Tattersall's shares in the above formula is:

3.1176 x $3.59
= $11.19218.

We worked out the relevant proportion of the cost base attributable to the cash component under this option as follows:

$3.99	x	100	=	26.28%
$3.99 + $11.19218

The relevant proportion of the cost base attributable to the Tattersall's shares under this option is as follows:

$11.19218	x	100	=	73.72%
$3.99 + $11.19218

'Maximise cash' option

Under the 'maximise cash' option, all (100%) of the cost base of the Unitab shares is attributable to the cash component, that is, the relevant proportion is 100%.

'All shares' option

Under the all shares option, all (100%) of the cost base of the Unitab shares is attributable to the Tattersall's shares, that is, the relevant proportion is 100%.