ATO Community

CGT on divested companies

This post is archived and may not be up-to-date.

Newbie

Views 796

Replies 1

I sold off my share portfolio this financial year and I am having trouble with the CGT calculations.  I have some shares that were given to me as a part of business ownership transactions.  How do I calculate CGT in these cases?  The details are listed below.

I left my portfolio alone over its life as I was always told shares are a long term investment.  I wasn't really warned about the CGT calculations.  I've already worked through the dividend reinvestment calculations so I feel the most laborious part of the work has already been done so I don't feel the need to hand this over to a tax professional.  However, if the calculations below are dificult I might just do that.

 

1. Credit union shares
I was a member of a credit union that was bought out by a bank.  In the transaction my $5 credit union membership was converted to a parcel of bank shares worth a considerable amout more.  How do I calculate my CGT liability in this case?

2. Divested entities
A company divested a subsidiary and sold it off to another company over a number of months.  I received shares in the new entities during the process.  I sold these shares off as well.  As I don't have a purchase price for these shares, how does CGT work in this case?

3. Stock split
A companies shares split sometime during my ownership.  When I sold off the portfolio, I had more shares that originally purchased.  How do I deal with this type of transaction for my CGT obligations?

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Former Community Support

Replies 0

Hi @tim_duggan

 

Welcome to our community and your first post.

 

For all your examples you need to establish the cost base. If the price you paid for investment is not clear  then you will need to establish its market value at the time you assumed ownership.

Search up share valuations through the entity or online generally through ato.gov.au. You may find a relevant fact sheet or a taxation ruling for the entity transaction that will clarify treatment.

 

These two links may prove useful also - CGT events affecting shares and units  (Check the index on the left and you will also see Working out your capital gain or loss) and  Bonus shares.

 

Thanks for your query
Kind regards
MarkA

1 REPLY 1

Most helpful response

Former Community Support

Replies 0

Hi @tim_duggan

 

Welcome to our community and your first post.

 

For all your examples you need to establish the cost base. If the price you paid for investment is not clear  then you will need to establish its market value at the time you assumed ownership.

Search up share valuations through the entity or online generally through ato.gov.au. You may find a relevant fact sheet or a taxation ruling for the entity transaction that will clarify treatment.

 

These two links may prove useful also - CGT events affecting shares and units  (Check the index on the left and you will also see Working out your capital gain or loss) and  Bonus shares.

 

Thanks for your query
Kind regards
MarkA