Ann: Max Trust Market Update - Return of Capital , page-3

re: Ann: Max Trust Market Update - Return of ... Htran,

Tax defered means your cost base gets reduced by the tax defered amount. You don't have to pay any tax on your distribution but you are still liable to pay tax when you sell your shares. Using your example, if you have bought the shares at 1.5C (I would have love to buy MXQ at 1.5C), after tax defered distribution of 25c, your new cost base is -23.5c. Lets assume, MXQ share price will drop to 15c after the distribuion and you decide to sell at 15C. You will be liable to pay CGT on 15+23.5=38.5 cents. Then apply the 50% cgt discount if you have held the shares for more than 1 year.
So from a CGT tax point of view it makes no difference whether you sell the shares now or after the distribution.
I hope this is useful.