• Appendix 4: Some major share transactions

    Attention

    Warning:

    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 can obtain information on key transactions involving major companies and other institutions from our website ato.gov.au. These transactions include mergers, takeovers, demergers, demutualisations, returns of capital, share buy-backs, and declarations by liquidators and administrators that shares are worthless.

    Go to the 'Individuals' menu and choose 'Capital gains tax' from the drop-down menu and you will find this information on the 'Capital gains tax essentials' page under 'Key events for Australian shareholders', for 2006-07 and earlier years.

    Check the website for a list of events that may affect your 2007 tax return.

    The table below contains information on some major transactions that have given rise to a CGT event for many people. Remember to take into account any capital gains or capital losses from these transactions on your tax return for the relevant income year. Also, make sure you record any changes to the cost base of your shares or units. Check the website for a more complete list of events in earlier years.

    If you are affected by a demerger there is a demerger calculator at ato.gov.au/demergers.

    Company

    Details of transaction

    Alinta Ltd

    Merger
    In October 2006, Alinta Ltd merged with Australian Gas Light Company (AGL).

    Former Alinta Ltd shareholders transferred their Alinta Ltd shares to the New Alinta group in exchange for shares in New Alinta. Shareholders received one share in New Alinta for each former Alinta Ltd share exchanged.

    A CGT event happened as a result of the exchange of former Alinta Ltd shares for shares in New Alinta. However, shareholders can choose scrip for scrip rollover.

    See our fact sheet Alinta Ltd merger with Australian Gas Light Company (AGL) - October 2006. (AGL shareholders should refer to our fact sheet Merger of AGL and Alinta Ltd - October 2006) at ato.gov.au/CGT under the heading 'Special circumstances'.

    AMP Ltd

    Demutualisation
    The acquisition cost for AMP Ltd shares was $10.43 per share and the acquisition date was 20 November 1997.

    Demerger
    In December 2003 the United Kingdom operations of AMP (referred to as 'HHG') were demerged from AMP. There were tax consequences from the demerger for shareholders in 2003-04 which are set out in our fact sheet AMP Group demerger: How it affects Australian resident shareholders at ato.gov.au/CGT (follow the link under 'View previous years' pages' then 'Special circumstances').

    You can also work out the cost base of AMP and HHG shares after the demerger using the fact sheet or the AMP demerger calculator on our website at ato.gov.au/demergers (follow the link under 'Advanced' then 'Calculators').

    2005 return of capital
    On 16 June 2005, AMP made a return of capital to shareholders of $0.40 per share. Shareholders needed to reduce the cost base and reduced cost base of each share by $0.40. For each share that had a cost base of less than $0.40, the difference was a capital gain in 2004-05.

    See our fact sheet AMP Limited (AMP): 2005 return of capital on our website at ato.gov.au/CGT (follow the link under 'View previous years' pages' then 'Advanced' followed by 'Publications').

    2006 return of capital
    On 19 June 2006, AMP made a return of capital to shareholders of $0.40 per share.

    Shareholders needed to reduce the cost base and reduced cost base of each share by $0.40. For each share that had a cost base of less than $0.40, the difference was a capital gain in 2005-06.

    See our fact sheet AMP Limited (AMP): 2006 return of capital on our website at ato.gov.au/CGT under the heading 'Special circumstances'.

    Aristocrat Leisure Ltd

    2005 return of capital
    On 15 July 2005, Aristocrat made a return of capital to shareholders of $0.21 per share.

    Shareholders needed to reduce the cost base and reduced cost base of each share by $0.21. For each share that had a cost base of less than $0.21, the difference was a capital gain in 2005-06.

    See our fact sheet Aristocrat Leisure Limited (Aristocrat): 2005 return of capital at ato.gov.au/CGT under the heading 'Special circumstances'.

    Australian Gas Light Company Ltd (AGL)

    Merger
    In October 2006, Australian Gas Light Company (AGL) merged with Alinta Ltd.

    Under the merger, former AGL shareholders transferred each AGL share to the New Alinta group, in exchange for 0.5775 of a New Alinta ordinary share and one New Alinta converting share.

    Immediately after the AGL shareholders received the New Alinta converting shares, they were bought back by New Alinta. As consideration for the buy-back of those converting shares, shareholders received one AGL Energy ordinary share for each converting share bought back.

    A CGT event happened as a result of both the exchange of AGL shares-for-shares in New Alinta and the buy-back of New Alinta converting shares for AGL Energy shares. In both cases, most AGL shareholders are eligible for CGT concessions that mean they may not need to include anything in their 2006-07 tax return from this transaction.

    See our fact sheet Merger of AGL and Alinta Ltd - October 2006 (Alinta shareholders should refer to our fact sheet Alinta Ltd merger with Australian Gas Light Company (AGL) - October 2006. - October 2006.) at ato.gov.au/CGT under the heading 'Special circumstances'.

    Aviva Corporation Ltd

    Demerger
    In September 2004, NGM Resources Ltd (NGM) was demerged from Aviva Corporation Ltd (Aviva). The demerger involved a return of capital of $0.0012 per share, and a demerger dividend of approximately $0.002 per share in Aviva. This amount was compulsorily applied as a consideration for the acquisition of shares in NGM. Aviva shareholders were entitled to one NGM share for every 37 of their Aviva shares.

    The fact sheet 2004 Aviva Corporation Ltd demerger and the demergers calculatoron our website at ato.gov.au/demergers (follow the link under 'Shareholder information') will help you work out the cost bases of your Aviva and NGM shares after the demerger.

    BHP Billiton Ltd

    Demerger
    In July 2002, BHP shareholders received one BHP Steel Ltd share for every five BHP Billiton shares held. In November 2003 BHP Steel Ltd changed its name to BlueScope Steel Ltd.

    BHP Billiton has advised that BHP Steel represented 5.063% of the market value of the group as a whole just after the demerger. Shareholders who received BHP Steel shares should use this percentage to apportion the sum of the cost bases of their post-CGT BHP Billiton shares between these shares and the BHP Steel shares they received in relation to those post-CGT BHP Billiton shares.

    The fact sheet 2002 BHP Billiton Group demerger and the demergers calculator on our website at ato.gov.au/demergers (follow the link under 'Shareholder information') will help you work out the cost bases of your BHP Billiton and BlueScope shares after the demerger.

    2006 share buy-back
    On 3 April 2006, BHP Billiton completed an off-market share buy-back. Shareholders who took part in the buy-back received $23.45 per share, which included a fully franked dividend of $21.35 per share.

    For CGT purposes, they are taken to have received $5.96 per share.

    The date the shares were sold under the buy-back was 3 April 2006.

    If the capital proceeds of $5.96 were more than the cost base of the share, the difference is a capital gain to the shareholder in 2005-06. If $5.96 was less than the share's reduced cost base, the difference is a capital loss.

    See our fact sheet BHP Billiton 2006 off-market share buy-back at ato.gov.au/CGT under the heading 'Special circumstances'.

    Commonwealth Bank of Australia Ltd

    Public share offer
    The Commonwealth Bank public shares were acquired on 13 July 1996. For shareholders who use the indexation method in calculating their capital gain, they index their first and final instalments from 13 July 1996.

    CSR Limited - Rinker Group Ltd

    Demerger
    In April 2003, CSR shareholders received one Rinker share for every CSR share they held.

    CSR has advised that Rinker represented 75% of the market value of the group as a whole just after the demerger. Shareholders who received Rinker shares should use this percentage to apportion the sum of the cost bases of their post-CGT CSR shares between these shares and the Rinker shares they received in relation to those post-CGT CSR shares.

    The demergers calculator on our website at ato.gov.au/demergers under the heading 'Advanced' then 'Calculators' will help you work out the cost bases of your RInker and CSR shares after the demerger. Also see our fact sheet in 'Shareholder information' under CSR Ltd demerger of Rinker Group, Demergers: 2003 CSR demerger: impact on resident individual shareholders.

    2005 return of capital
    On 4 August 2005, CSR made a return of capital to shareholders of $0.20 per share.

    Shareholders needed to reduce the cost base and reduced cost base of each share by $0.20. For each share that had a cost base of less than $0.20, the difference was a capital gain in 2005-06.

    See our fact sheet CSR Limited (CSR): 2005 return of capital at ato.gov.au/CGT under the heading 'Special circumstances'.

    Mayne Group Ltd

    Demerger
    On 30 November 2005 Mayne Group demerged Mayne Pharma and shareholders received a return of capital of $2.49 for every Mayne Group share they owned. These amounts were compulsorily applied as consideration for the acquisition of shares in Mayne Pharma. Shareholders received one Mayne Pharma Ltd share for every Mayne Group share they held. After the demerger Mayne Group Limited changed its name to Symbion Health Ltd.

    Mayne Group has advised that Mayne Pharma represented 44.217% of the market value of the group as a whole just after the demerger. Shareholders who received Mayne Pharma shares should use this percentage to apportion the sum of the cost bases of their post-CGT Mayne Group shares between these shares and the Mayne Pharma shares they received in relation to those post-CGT Mayne Group shares.

    The fact sheet Demergers: 2005 Mayne Group Ltd (renamed Symbion Health Ltd) demerger and the demergers calculator on our website at ato.gov.au/demergers will help you work out the cost bases of your Mayne Group and Mayne Pharma shares after the demerger and to work out whether you have made a capital gain under the demerger.

    Minotaur Resources Ltd

    Demerger and takeover
    On 17 February 2005, Minotaur Resources Ltd (Minotaur) demerged Minotaur Exploration Ltd (MinEx) and shareholders received a return of capital of $0.3258 and a dividend for every Minotaur share they owned. These amounts were compulsorily applied as consideration for the acquisition of shares in MinEx. That is, shareholders did not receive a cash payment, instead these amounts were used to give them a MinEx share.

    For every Minotaur share owned, shareholders received one MinEx share.

    In conjunction with the demerger, Oxiana Ltd (Oxiana) and Minotaur shareholders agreed to a takeover of Minotaur. Under the takeover, Minotaur shareholders received 1.85 new Oxiana shares for each of their Minotaur shares.

    The fact sheetDemergers: 2005 Minotaur Resources Ltd demerger and the demergers calculator on our website at ato.gov.au/demergers (follow the link under 'Shareholder information') will help you to calculate the cost bases of your MinEx and Oxiana shares after the demerger and to work out whether you have made a capital gain under the demerger.

    Patrick Corporation Ltd

    Takeover
    From 29 September 2005 to 25 May 2006, Toll Holdings Ltd made a takeover offer for Patrick shares.

    Patrick shareholders who accepted the offer received $3 cash plus 0.4 Toll shares for each Patrick share. Patrick shareholders who did not accept the offer before 7.00pm (Melbourne time) on 25 May 2006 had their shares compulsorily acquired on 1 July 2006 and received the same number of Toll shares and cash as the other shareholders.

    The disposal of your Patrick shares is a CGT event. You can choose a scrip-for-scrip rollover and disregard the capital gains on the disposal of your Patrick shares to the extent you received Toll shares (but not cash) for them. Shareholders who accepted Toll's offer, made a capital gain or capital loss in the 2005-06 year. Shareholders whose Patrick shares were compulsorily acquired made a capital gain or capital loss in the 2006-07 year.

    See our fact sheet Patrick Corporation Limited takeover by Toll Holdings Limited at ato.gov.au/CGT under the heading 'Advanced' then 'Publications' to help you work out the tax consequences of the takeover.

    Pivot Ltd

    Merger
    Pivot Ltd changed its name to Incitec-Pivot Ltd in April 2003 and then merged with Incitec Fertilizers Ltd (IFL) on 1 June 2003.

    Shareholders of Pivot who acquired their shares before 20 September 1985 made a capital gain under CGT event K6 if their capital proceeds per share was more than $15.08 and they disposed of them after 28 July 2003.

    The capital gain is equal to 70% of the difference between the capital proceeds and $15.08. (No capital loss is available under CGT event K6.)

    See our fact sheet Pivot merger with Incitec - CGT on sale of pre-CGT shares at ato.gov.au/CGT under the heading 'Special circumstances'.

    Promina Group Ltd

    2005 return of capital
    On 20 June 2005 Promina Group Ltd made a return of capital to shareholders of $0.23 per share.

    Shareholders needed to reduce the cost base and reduced cost base of each share by $0.23. For each share that had a cost base of less than $0.23, the difference was a capital gain in 2004-05.

    See our fact sheet Promina Group Ltd (Promina) 2005 return of capital at ato.gov.au/CGT (follow the link under 'View previous years' pages' then 'Advanced' then 'Publications').

    2006 return of capital
    On 16 June 2006 Promina Group Ltd made a return of capital to shareholders of $0.15 per share.

    Shareholders needed to reduce the cost base and reduced cost base of each share by $0.15. For each share that had a cost base of less than $0.15, the difference was a capital gain in 2005-06.

    See our fact sheet Promina Group Ltd (Promina): 2006 return of capital at ato.gov.au/CGT under the heading 'Special circumstances'.

    St George Bank

    2006 share buy-back
    On 21 February 2006, St George Bank completed an off-market share buy-back. Shareholders who took part in the buy-back received $25.69 per share, which included a fully franked dividend of $19.15 per share.

    For CGT purposes, they are taken to have received $10.59 per share as the capital component of the buy-back price.

    The date the shares were sold under the buy-back was 21 February 2006.

    If the capital proceeds of $10.59 per share were more than the cost base of the share, the difference is a capital gain to the shareholder in 2005-06. If $10.59 was less than the share's reduced cost base of each share, the difference is a capital loss.

    See our fact sheet St George Bank: 2006 off-market share buy-back at ato.gov.au/CGT under the heading 'Special circumstances'.

    Last modified: 06 Oct 2009QC 27893