Toll's takeover of Patrick - CGT worksheets example

Billie had 3,560 Patrick shares, acquired as follows:


Number of shares














Billie has no other capital gains or losses for 2006 but does have $3,150 of unapplied capital losses from prior years.

Step 1

Complete worksheet A.

Worksheet A - work out your capital proceeds

Date of event - either the date from 29/9/05 to 25/5/06 when you accepted the offer;
or 1/7/06 if you did not accept the offer



Number of Patrick shares exchanged in the takeover



Value of each Patrick share on date of acceptance - value from table 1 for date A1



Number of Toll shares received



Value of each Toll share on date of acceptance - value from table 2 for date A1



Value of Toll shares received - (A4)   (A5)



Cash received



Total capital proceeds - (A6) + (A7)



Step 2

Complete worksheet B. See page 14 of the PDF version for a copy of the completed worksheet.

Note 1 Choosing whether to apply scrip for scrip roll-over

Some of the factors you may want to consider before making your choice include:

  • Once you have lodged your tax return you cannot change your choice.
  • If you don't choose roll-over, you may still pay little or no tax on the capital gain:
    • your taxable income, with the capital gain included, may attract little or no tax
    • if you have sufficient capital losses, the capital gain could be reduced to nil so that no tax is payable.
  • Projections of your tax payable on the capital gain in the current year and a later year when you may dispose of the new shares may produce a lower tax if you do not choose roll-over. However you will need to consider the following:
    • tax rates may change
    • your level of income may increase or decrease in future years
    • share values may change
    • the formulas for calculating the new cost base may provide a tax advantage or disincentive.

Note 2 Indexation method

For Patrick shares that you acquired before 11.45am 21 September 1999, you may choose between an indexed gain and an unindexed gain for this takeover, but the cost base of your new Toll shares will be worked out using an unindexed cost base. There is no one factor to use to work out whether to choose an indexed gain as it depends on the type of asset you own, how long you have owned it, the dates you owned it and past rates of inflation. Because capital losses must be offset against capital gains before the discount is applied, your choice may also depend on the amount of capital losses that you have available.

This worksheet does not cater for the separate calculation of an indexed capital gain. Therefore, if you choose to use an indexed capital gain, in working out B6 (and B10), you must index the cost base (B4) up to September 1999. If you do this and you choose roll-over, you must then recalculate B4 and B9 to exclude indexation from your calculation of the cost base of your new Toll shares (C3).

Note 3 Discount method

For parcels where you use the discount method, show the amounts at steps 2 and 3 before you apply the 50% discount.

Step 3

Summarise the amounts from this takeover that you need for your capital gains and losses calculation on your tax return. 6

Amounts you need to take into account when completing the Capital gains question on your tax return

Income year *


Indexed capital gains from this takeover


Discount capital gains from this takeover


Other capital gains from this takeover


Total capital gains from this takeover


Capital losses from this takeover


*  2005-06 if you accepted the takeover offer or
   2006-07 if your shares were compulsorily acquired


Notes on the worked example:

  1. Billie's records show that she posted her acceptance of the Toll bid on this day.
  2. Billie must do these calculations for each parcel to see if she can apply roll-over to it.
  3. Billie crossed these amounts out after deciding that she would apply roll-over to all of her parcels.
  4. Billie could have chosen to apply indexation to this parcel as it was acquired before 21 September 1999.
  5. Billie did not need to do these calculations if she had already decided to apply roll-over. In this example, she has done all of the sums before making that decision, then crossed out the amounts that she has chosen not to apply.

If Billie chooses the roll-over option, she must use both B10 (capital gain if roll-over chosen) and C3 (Toll share cost base with roll-over).

If she doesn't choose the roll-over option, she must use both B6 (capital gain or loss) and C2 (Toll share cost base without roll-over).

  1. As this is Billie's only capital gain for the year, she calculates her entry for her 2005-06 tax return as follows:


Total capital gain: $6,532.74 + $610.02 = $7,142.76

Net capital gain:


Offset losses against total capital gain.

$7,142.76 - $3,150.00 = $3,992.76


Reduce discount gains by CGT discount (individuals rate).

50% of $3,992.76 = $1,996.38

*Billie chose to apply the first $610.02 of the $3,150 unapplied capital losses against her 'other capital gain' of $610.02 with the balance applied against her 'discount capital gain' of $6,532.74.

Did you have a capital gains tax event during the year? Yes

Net capital gain: $1,996

Total current year capital gains: $7,142

As requested by the Tax Office, Billie does not show cents on her tax return.

    Last modified: 06 Oct 2009QC 19172