(iii) Cost of acquisition of shares of resulting company. My guess (in the absence of analysts discounted cash flow valuations) is that an Endeavour share will be worth around $10.00. Sharesight makes it easy for investors to handle corporate actions (even complicated demergers) and track the capital gains tax implications. Demerger- Tax Implication on Individual. Option 2 is a significant improvement over the status quo, as there would be no tax consequences which arise from holding shares in a demerged company. Endeavour looks ready to fit this bill. For the purposes of this section, "net worth" shall mean the aggregate of the paid-up share capital and general reserves as appearing in the books of account of the demerged company immediately before the demerger, The cost of the original shares held by the shareholders in the demerged company shall be deemed to be reduced by the cost of the shares assigned to the shares of the resulting company. As mentioned earlier, unless specifically exempted, gains arising on the transfer of capital assets are chargeable to income tax as capital gains. Between demanding jobs, family life, extracurricular activities, and everything in between, it can be hard to carve out the time to cook healthy, home-cooked meals. If you had owned your Woolworths shares for more than 12months prior to the receipt of the distribution, you can now reduce the capital gain by the 50% CGT discount. Further, the Finance Act, 2021 has also made an amendment to section 55(2)(a) of the Act in relation to determination of cost of acquisition of certain intangible assets, including goodwill. It has been prepared without having regard to or taking into account any particular investors objectives, financial situation and/or needs. Australian Taxation Office for the Commonwealth of Australia. This value is apportioned 99.4% to the SCA Property Retail Trust unit and 0.6% to the SCA Property Management Trust unit, giving their separate cost base of: For tax purposes you acquired the stapled securities on 11December 2012. In addition dividends also have to be recorded against Endeavour for the Sept 2021 dividend. You apportion your pre-demerger WOW cost base 85.81% to your post-demerger WOW shares and 14.19% to your EDV. 5 Demerger calculator: Set the ratio to 85.81 : 14.19. 3 On the pop-up window, select Adjust Cost Base from the transaction type dropdown. Unlike in the case of merger, in a demerger, the demerged entity may not cease to exist. Here's what Step 3: Stacey reduces the capital gain by her Dividend amount of $283.90. . Dividend amount of 1,000 $0.14195442 = $141.95, Capital return amount of 1,000 $0.14598558 = $145.98, Capital proceeds of $1.6248918 ($1.6347 99.4%), Total capital gain $38.766 ($0.19383 200 units), Capital proceeds of $0.0098082 ($1.6347 0.6%), Total capital gain $0.234 ($0.00117 200 units), Less cost base of $23,000.00 + 100.00 = $23,100.00, Dividend amount of 2,000 $0.14195442 = $283.90, Capital return amount of 2,000 $0.14598558 = $291.97, Capital proceeds of 400 $1.4397 = $575.88, Capital gain on the sale of her Woolworths shares of $35,700, Capital gain on the ending of the right to receive stapled securities = $291.98, Less prior year net capital loss of $50.00 = $35,941.98, Stacey now applies the 50% CGT discount $35,941.98 50% = $17,970.99, SCA Property Retail Trust units = $1.4310618, SCA Property Management Trust units = $0.0086382. Paul has more than 30 years experience in financial services and banking, including 20 years with the Commonwealth Bank Group in senior leadership roles. Because each stapled security is made up of one unit in SCA Property Management Trust and one unit in SCA Property Retail Trust, the sale proceeds are apportioned 99.4% to the SCA Property Retail Trust unit and 0.6% to the SCA Property Management Trust unit, giving separate sale proceeds of: The cost base of the units is apportioned the same way. This is because the dividend amount, and the franking credit attached to it, must be included at the Dividend label of your tax return. OVERVIEW OF THE DEMERGER. Benefit of exemption is available to shareholders of the demerged company only when consideration is received in the form of shares of the resulting company. Vanilla has an undeserved reputation as being boring, but in reality, the flavor provides the backbone for many sweet treats. The resulting demerger will create two independent ASX-listed companies with . That is, he did not return the Unit Retention Form. But with many brokers charging low minimums, in 2021, this is not that big a deal.