VITA GROUP LIMITED (ASX:VTG) - Ann: VTG - Scheme Booklet registered with ASIC, page-18 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by Schmucky: ↑

Refer to the tax considerations Page 84 in the booklet. It clearly states that you do not get the capital loss. I feel a few too many investors missed this hence why this is trading at above 12.75.

This price only makes sense for those that have a low tax rate and are just after a franking refund. You are actually worse off buying this investment... so it would be interesting why some arb funds are on it.

Anti-overlap
Where the Permitted Dividend forms part of the capital proceeds, the amount of any capital gain
made by a Vita Shareholder will be reduced by the amount of the Permitted Dividend which has
been included in the assessable income of the Vita Shareholder.
If the amount of the Permitted Dividend exceeds the capital gain, the capital gain is reduced to
zero. However, the capital gain made by the Vita Shareholder will not be reduced by the
amount of the franking credit that is included in the Vita Shareholder's assessable income as a
result of the receipt of the Permitted Dividend by the Vita Shareholder.
If a Vita Shareholder makes a capital loss in relation to the disposal of the Vita Shares and the
Permitted Dividend forms part of the capital proceeds in relation to that sale, the Vita
Shareholder's capital loss is calculated based on capital proceeds which include the Permitted
Dividend (meaning that the capital loss is reduced by the amount of the Permitted Dividend).

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With all due respect you are not reading/understanding it correctly.
Nowhere in what you've posted does it say you do not get the loss!

However you have alerted me to the fact that the permitted dividend needs to be included in capital proceeds to calculate the loss.
Everyone who purchased shares between August 2012 and early September last year will be sitting on a loss as the SP was higher than what the scheme will pay you. I'll stand corrected but I can't recall there being a capital return to reduce cost base in that time.
I first bought shares at around $3, (glad I didn't hang on to the end) I would be using the substantial loss against my gains in my tax return if I still owned.

Cost base and reduced cost base
The cost base of each Vita Share should generally include the amount paid to acquire the
relevant Vita Share, plus any non-deductible costs of acquisition, holding and disposal (e.g.
brokerage fees and stamp duty). The cost base will be reduced by any return of capital
received in connection with the Vita Shares during the ownership of the Vita Shares (if any).
The reduced cost base, used to determine a capital loss, is calculated in a similar manner.