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SilentPartnr

2,247 Posts.

225

12/12/21

08:24

Post #: 58237187
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Originally posted by thewhitekiwi ↑

I am trying to understand exactly what/when the capital gains is triggered for the OSH shares through this merger process and how it works if we sell STO (ex OSH shares) in the coming months. I have held both OSH and STO shares for over 12 months now.

Is the capital gains for OSH shares triggered on conversion? – It seems it is from points i) below. But then point v) mentions scrip-for-scrip roll- over relief possible if some conditions met.

Question is – If I happen to sell some STO shares in the next few week (that were bought as OSH shares), does the Capital gains event kick in twice? Ie the date of the conversion of the shares for the OSH shares, and then the date of the sale of the actual STO shares (noting that the conversion date would then be the purchase date? ) – If this is the case, would this mean to get the 50% CGT discount for the converted shares one has to wait for 12 months to pass after the conversion date?

I have read the scheme booklet but find it some what confusing, so any clarification to this would be much appreciated!

Cheers!

Note that The Scheme Booklet has the following on pages 92/93

b) Australian resident shareholdersThis section applies to Scheme Shareholders who are residents of Australia for income tax purposes.

i) CGT Event on disposal of Scheme Shares to SantosScheme Shareholders will dispose of their Scheme Shares to Santos in exchange for the Scheme Consideration, comprising 0.6275 New Santos Shares in respect of each Oil Search Share held by a Scheme Shareholder as at the Record Date.The disposal of the Scheme Shares to Santos under the Scheme will give rise to a CGT event for Scheme Shareholders. The timing of the CGT event for Scheme Shareholders should be the date the Scheme Shares are disposed of under the Scheme, being the Implementation Date.i) CGT Event on disposal of Scheme Shares to Santos continuedIn the absence of CGT roll-over relief (discussed below), the following tax consequences are expected to arise for the Scheme Shareholders that acquired (or are deemed to have acquired) their Scheme Shares on or after 20 September 1985:– a capital gain will be realised to the extent the capital proceeds received by the Scheme Shareholder from the disposal of their SchemeShares exceed the cost base of those shares; or– a capital loss will be realised to the extent the capital proceeds received by the Scheme Shareholder from the disposal of their Scheme Shares are less than the reduced cost base of those shares.Capital losses can only be offset against capital gains derived in the same income year or later income years. Specific loss recoupment rules apply to companies which must be satisfied if those tax losses are to be used in current or future years. Scheme Shareholders should seek their own tax advice in relation to the operation of these rules.

v) CGT Scrip-for-scrip roll-over reliefScheme Shareholders who make a capital gain from the disposal of their Scheme Shares may be eligible to choose CGT scrip-for-scrip roll- over relief (provided certain conditions are met). Broadly, CGT scrip-for-scrip roll-over relief enables Scheme Shareholders to disregard the capital gain they make from the disposal of their Scheme Shares under the Scheme.If a capital loss arises, CGT scrip-for-scrip roll-over relief is not available.Scheme Shareholders do not need to inform the ATO, or document their choice to claim CGT scrip-for-scrip roll-over relief in any particular way, other than to complete their income tax return in a manner consistent with their choice.

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"You can only choose the rollover if you have made a capital gain from such an exchange on or after 10 December 1999. A rollover does not apply to a capital loss."

"
The rollover allows you to disregard the capital gain made from the original shares, units or other interest. You are taken to have acquired the replacement shares, units or other interest for the cost base of the original interest.

You can apply the CGT discount when you dispose of new shares providing the combined period that you owned the original shares and the new shares is at least 12 months."

Source: Scrip for scrip rollover | Australian Taxation Office (ato.gov.au)

Regards

SP

OSH Price at posting: $4.04 Sentiment: Hold Disclosure: Held
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