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Telecom Corporation of New Zealand Limited demerger (2011-12)

Impact on resident individual shareholders, including capital gains tax consequences and examples.

Last updated 12 August 2012

This information applies to you if you:

  • are a Telecom Corporation of New Zealand Limited (TCNZ) shareholder
  • are an Australian resident
  • held shares when the demerger was implemented on 30 November 2011.

This information does not apply if your shares were:

  • held as trading stock
  • held for resale at a profit
  • acquired under an employee share scheme (ESS) and have not yet been taxed under the ESS provisions.


Under the demerger, Chorus Limited (Chorus) demerged from TCNZ. Shares in Chorus trade on the Australian Securities Exchange (ASX) under the code 'CNU'.

The demerger involved the transfer to TCNZ shareholders of one Chorus share for every five TCNZ shares they owned in TCNZ at 7.00pm on the record date of 25 November 2011 (rounded up or down to the nearest whole Chorus share). For Australian tax purposes, this constituted a share capital reduction and the distribution of a dividend amount by TCNZ.

TCNZ was privatised in 1990, therefore all TCNZ shares are acquired after 19 September 1985 (post capital gains tax [CGT]).

Foreign currency

If a transaction or event involving an amount of money or the market value of other property is relevant for CGT purposes and the money or market value is expressed in a foreign currency, the amount or value is to be converted into the equivalent amount of Australian currency at the time of the transaction or event.

In this case, the time of the transaction or event is the demerger implementation date of 30 November 2011.

The exchange rate for the New Zealand dollar on 30 November 2011 was A$1:NZ$1.3536.

Shareholder in TCNZ

If you were a shareholder in TCNZ when Chorus was demerged, you need to:

A CGT event happened to each TCNZ share you held at the time TCNZ reduced its share capital.

Demerger rollover relief is available for this demerger if you made a capital gain.

Whether you choose rollover or not, you must recalculate the cost base and reduced cost base of each of your TCNZ shares and Chorus shares.

You are taken to have acquired your Chorus shares on the same date as you acquired the corresponding TCNZ shares.

You do not have to include any amount in your 2011-12 tax return for this demerger dividend component.

Telecom corporation of New Zealand limited demerger 2012 more information