I couldn’t find anywhere, either on the ATO website or in previous posts here, that covers this issue.
On Friday, Aventus Group AVN (a manager of shopping centres) was taken over by Home Consortium HDN (another such manager).
Both included real estate trusts and ordinary shares. I’m only interested in the share side.
For simplicity purposes, let’s say I bought 1,000 AVN shares in Sep-19 at $2.63 per share.
AVN ceased trading last week at $3.41 per share.
The terms of the takeover were
2.20 HDN shares per 1 AVN share
28.5 cents per 1 AVN share
So I received 2,200 HDN shares and $285.
The question is how to determine the tax treatment of the $285 and the cost base of the 2,200 HDN shares.
Since I haven’t done anything myself, I would have thought the $285 is essentially a return of capital on the original purchase of the AVN share, making the cost base for them (ignoring brokerage which will need to be counted), 2630 - 285 = $2,345
And therefore the cost base for the HDN shares $2,345 or $1.067 per share, which will be counted on disposal.
My question is…
Is this the right way to handle it,
Or is the $285 somehow taxable, and the acquisition of the HDN shares and disposal of the AVN shares a separate CGT event?
Any tax experts out there? I have had advice on here about how to calculate CGT before, particularly on how to itemise discountable and non-discountable CGT events, disputed by an accountant.