I work for a US based company (Company A) that was acquired by another US based company (Company B). As a result of this acquisition, my Company A US based shares (acquired via RSU and ESPP) were exchanged for cash and shares in the acquiring company Company B. US taxation guidance has been given, however I am struggling how to translate Australia and ATO. The US brokerage firm has provided some US IRS taxation documentation.
Firstly, the "cash component" has been declared as a Dividend with IRS (which if same applied to Australia, would be fully added to my taxable income, minus the offsetting of the withheld tax paid in US) and feel that it has higher tax implications than a "sale and capital gain/loss vs cost basis" taxation event.
Secondly, the company B shares now have a cost basis of $0, which would mean that upon sale would be 100% capital gains applicable. Given that I have already paid tax on the Company A shares (vesting RSU and vesting ESPP), and those Company A shares did have a cost basis originally which now doesn't appear to take into any effect, I am seeking guidance as to how to approach this situation from an Australian taxation perspective. Any help is much appreciated, as there are hundreds of Australian based employees and shareholders who are impacted by this acquisition.
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