Ann: Demerger of The Lottery Corporation - Briefing Presentation, page-81

My understanding is, by doing nothing and adjusting ur initial cost to the calculated reduced cost base for both company’s, it acts as the new cost base value for future capital gains provision.

If u initially purchased ur TAH share for $5 and after the demerger, u workout ur new cost base as being $1 for TAH and $4 for TLC , by doing nothing the Tax department would assume that ur seeking rollover provision.

If u sell your TAH shares in the future for $10, u cannot claim that the TAH shares cost u $5, by claiming that u only made a capital gain of $5, when in affect the gains is $9

Under the rollover provision the Tax dept would use the reduced cost base - it amounts too, that the Tax dept is stating that ur initial purchasing cost for the TAH shares was only $1 and not $5.

That is my understanding…don’t take my word as being factual because I’m simply a hobbyist investor…mainly taking an interested in the market for sht stirring the corporate world.

The area that I’m not confident in, is whether for capitals gains purposes, the acquisition date for TLC is deemed to be to be the last purchase date that u bought ur TAH Shares before the demerger.

As far as I understand that is the case, thus if u bought ur TAH shares over 12 months ago and u wish to sell ur TLC shares u should be entitled to the capital gains discount.
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I’m completely lost when it comes to the significance of the $3.42 in the tax ruling…I would be simply assuming it is important if u taken the option to flog off ur shares under the sale facility

Hopefully there other posters who’re more knowledgeable about the the tax domain.

From my experience this might be the only comments that u will get in a layman’s format….that has been my experience on HC, everyone shies away from commenting on their understanding of tax gibberish!

Better put the normal disclaimer, DYOR!