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  • CBS Australia takeover of Ten Network

    Ten Network Holdings Limited (TNHL) was taken over by CBS International Television Australia Pty Ltd (CBS Australia) on 10 November 2017.

    Shareholders of TNHL will need to account for a capital gains tax event occurring on the takeover date. It is expected that taxpayers will calculate an amount of capital loss which can be offset against any capital gains arising in the 2018 year.

    Example:

    Andrew purchased 1000 TNHL shares in 2012 for $2,120 ($2.12 per share). His brokerage costs were $50, making his cost base $2,170, or $2.14 per share.

    The receivers and managers of TNHL transferred Andrew's shares to CBS Network Ten BV for no consideration pursuant to the court order.

    Andrew calculates his capital losses as follows:

    • capital proceeds - $0.00
    • cost base of the shares - $2,170
    • capital losses - $2,170

    Andrew also made a capital gain of $1500 from the sale of shares in the 2018 year. In his 2018 year tax return Andrew will declare a capital loss of $670 which he can use to offset against any capital gains in future years.

    End of example

    Details

    On the 10 November 2017, leave was granted to the receivers and managers of TNHL to transfer shares in TNHL pursuant to the deed of company arrangement to CBS Australia or its nominee. CBS Network Ten BV was nominated as the proposed transferee. Shareholders in TNHL did not receive any payments for the transfer of their shares.

    Find out more:

    • In the matter of Ten Network Holdings Limited (subject to a deed of company arrangement) (receivers and managers appointed) [2017] NSWSC 1529External Link

    Capital gains tax (CGT) event A1 happened on 10 November 2017, where shares in TNHL shares were transferred to CBS Network Ten BV because there is a change in ownership which is due to some act or event or by the operation of law.

    See also:

    You and your shares 2017

    Guide to capital gains tax 2017

    Personal investors guide to capital gains tax 2017

    For more information or for help in applying this information to your own circumstances, phone us on 13 28 61.

      Last modified: 24 Apr 2018QC 55168