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Scrip for Scrip rollover tax impact

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ZM
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Hi everyone,

I apologise if this has been asked before.

 

I have shares in a company that has now recommended to shareholders to accept a scrip for scrip only takeover offer.

 

Working out the amount of shares being offered this would work out to be a net capital loss on my initial investment.

 

I'm wondering how I represent this on my upcoming tax return and potentially on future returns. Am I entitled to treat this event as a capital loss? I have also read that I cannot rollover a capital loss as I would if this event consituted a net gain on my initial investment, is this correct?

 

Thanks in advance,

ZM

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ATO Certified

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Hi @ZM,


Thank you for your patience.


Yes, you can treat this takeover offer as a capital loss, refer to takeover and mergers on our website. See the Desiree example on this page and assume that the cash component is zero. Where you have made a capital loss you are not entitled to the rollover, but you will have a capital loss amount that you can use to offset against capital gains in the current year, and if not used in the current year,  you can carry the  capital loss forward and  apply it against capital gains made in future years. 


If you have further questions you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with a customer service representative.


Hope this helps, SueO

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Community Support

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Hi @ZM,

 

Welcome to our Community, and thank you for your question.

 

We are seeking some additional information from a specialist area and will respond asap.

 

Thanks, SueO

Best answer

ATO Certified

Community Support

Replies 0

Hi @ZM,


Thank you for your patience.


Yes, you can treat this takeover offer as a capital loss, refer to takeover and mergers on our website. See the Desiree example on this page and assume that the cash component is zero. Where you have made a capital loss you are not entitled to the rollover, but you will have a capital loss amount that you can use to offset against capital gains in the current year, and if not used in the current year,  you can carry the  capital loss forward and  apply it against capital gains made in future years. 


If you have further questions you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with a customer service representative.


Hope this helps, SueO

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