EXS 0.00% 26.0¢ exco resources limited

tax implication, page-7

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    Just a few points on the potential tax implications.

    It has been implied that there will be something along the lines of a 28c fully franked dividend and a 10c captial return (just use this as an example).

    We are waiting on an ATO ruling for the capital return which will determine the size of the capital return vs dividend but it will add up to $135m.

    A 28c fully franked dividend will carry a 12c franking credit. (cashed up 28c + 12c, the dividend is worth 40c to Aussie tax payers).
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    Q. "Let's say some shares are purchased at about 62c and later sold (after the dividend and capital return are paid) at say 30c or 40c. Does that constitute a capital loss for tax purposes?"
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    A. The answer to this is YES. It depends on the capital return but assuming it is 10c then the cost basis of your purchase will be reduced by this amount as well so...

    62c - 10c = 52c cost basis.

    Selling the shares for 30c would constitute a capital loss of 22c (52c - 30c) or selling them for 40c would constitute a loss of 12c.
 
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