• Where you do not or cannot choose rollover

    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

    Where you do not or you cannot choose rollover (for example, because a CGT event did not happen to your original interests), the new interests that you receive in relation to your pre-CGT original interests are treated as post-CGT interests. The cost base of these new interests will be worked out under the ordinary cost base rules (this will generally be equal to the capital return and dividend distributed from the head entity that is applied to acquire those new interests).

    The cost base and reduced cost base of your remaining post-CGT original interests and your post-CGT new interests (other than those received in relation to pre-CGT original interests) are calculated in the same way as shown in the example above - except that you ignore the new interests received in relation to pre-CGT original interests in the calculation.

    There is no change to the acquisition date of your original interests.

    Example - With pre-CGT interests

    Anita owned 400 BHP Billiton shares immediately before the demerger:

    • 120 pre-CGT shares, and
    • 280 post-CGT shares (the cost base of which, immediately before the demerger, was $2,500).

    i. If Anita chose rollover, the 24 BHP Steel shares she received in relation to the 120 pre CGTBHP Billiton shares will also be pre-CGT.

    ii. Immediately after the demerger, the cost base and reduced cost base of her 280 post-CGT BHPBilliton shares and the 56 BHP Steel shares she received in relation to those BHP Billiton shares are calculated in the same way as shown in the example above.

    iii. If Anita did not choose rollover, the 24 BHP Steel shares she received in relation to the 120 pre-CGT BHP shares are post-CGT shares acquired on the date of demerger. Immediately after the demerger, the cost base and reduced cost base of the 24 BHP Steel shares are $3.45 per share (the capital return of $0.69 per share x 5).
    Immediately after the demerger, the cost base and reduced cost base of her 280 post-CGT BHP Billiton shares and the 56 BHP Steel shares she received in relation to those BHP Billiton shares is calculated in the same way as shown in the example above.

    In either case, there is no change to the pre-CGT status of Anita's 120 BHP BIlliton shares.

    End of example
    Last modified: 04 Mar 2016QC 27527