• ##### Cost base calculations where you do not have pre-CGT interests.

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This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

You work out the cost base and reduced cost base of your remaining post-CGT original interests and your post-CGT new interests immediately after the demerger. You do this by spreading the total cost base of your post-CGT original interests (immediately before the demerger) over both your remaining post-CGT original interests and your post-CGT new interests. The following steps explain how to do this:

 Step 1: Sum the cost bases of your post-CGT original interests immediately before the demerger. (Do not reduce your total cost base by any capital amounts returned to you under the demerger and do not include indexation.) Step 2: Use the relevant percentages to apportion the Step 1 amount between; your post-CGT original interests in the head entity, and your post-CGT new interests in the demerged entity The head entity should advise you of the relevant percentages to use. Step 3: Divide the cost base apportioned to the head entity interests (from Step 2) by the number of remaining post-CGT original interests you own. Step 4: Divide the cost base apportioned to the demerged entity interests (from Step 2) by the number of post-CGT new interests you own.

These amounts will form the first element of the cost base and reduced cost base of your post-CGT original interests and post-CGT new interests.

Example - no pre-CGT interests

Under the BHP Billiton Ltd demerger of BHP Steel Ltd, shareholders received one BHP Steel share for every five BHP Billiton shares they owned at the date of the demerger.

Anita owned 280 BHP Billiton shares (all post-CGT) with a cost base of \$2,500 immediately before the demerger. Under the demerger, Anita received 56 BHP Steel shares. Anita works out the cost base and reduced cost base of her BHP Billiton shares and BHP Steel shares as follows:

 Step 1: The total cost base of the BHP Billiton shares immediately before the demerger was \$2,500. Step 2: BHP Billiton advised to apportion 94.937% of the total cost base from Step 1 to BHP Billiton shares, and 5.063% to BHP Steel shares: BHP Billiton - 94.937% × \$2,500 = \$2,373.43 BHP Steel - 5.063% × \$2,500 = \$126.58 Step 3: Divide the Step 2(a) amount by the 280 BHP Billiton shares: \$2,373.43 ÷ 280 = \$8.48 per share Step 4: Divide the Step 2(b) amount by the 56 BHP Steel shares \$126.58 ÷ 56 = \$2.26 per share

End of example