The right to receive the new News Corp shares distributed under the Separation is one of the rights inherent in the 21CF shares held at the Record date (21 June 2013). If you disposed of the shares after 21 June 2013 and before the date of distribution (Separation date) (28 June 2013), you still have the right to receive the new News Corp shares and this is a separate CGT asset.
This right is acquired at the same time when the corresponding 21CF share was acquired. The cost base for this CGT asset is nil. Therefore, you will make a capital gain from this event of $4.15 per Class A share and $4.12 per Class B share. Where the corresponding 21CF share was acquired at least 12 months prior the Separation date you will be eligible for the discount in accordance with normal rules.
Example 3: Shares sold before 28 June 2013
Jim purchased 400 Class A shares in 21CF in 2008 for $6.00 per share. He continued to hold the 21CF shares on 21 June 2013. He sold his shares on 26 June 2013 for $8.50 per share. CGT event A1 happens at this time for the sale transaction. Also, as a result of the Separation, Jim will have received 100 Class A shares in new News Corp. The cost base of Jim's new shares in new News Corp is $16.60 per share (i.e. a total cost base of $1,660). Jim makes a capital gain on the sale transaction of $1,000 (400 x ($8.50 - $6.00)). He is entitled to use the CGT discount method to calculate his capital gain. Therefore, assuming Jim has no current or carried forward capital losses, he will need to include $500 (being the capital gain of $1,000 multiplied by 50%) in his 2012-13 income tax return.
Even though Jim sold his 21CF shares, he retained his right to receive shares in new News Corp on 28 June 2013. The cost base of this right is Nil. The capital proceeds from the satisfaction of the right related to the 21CF Class A shares is $4.15. Jim will make a capital gain of $1,660 (being 400 shares multiplied by $4.15). As the right is considered to be acquired when the corresponding 21CF share was acquired, Jim is able to use the CGT discount method to calculate his capital gain. Therefore, assuming Jim has no current or carried forward capital losses; his discounted capital gain is $830 (being $1,660 multiplied by 50%).
The total discounted capital gain Jim will need to include in his income tax return for the 2012-13 income year is $1,330 ($500 + $830).
End of example