It's called scrip-for-scrip rollover CGT relief if they (we) get 80% over the line, we don't pay CGT on any profit made from DGO shares at the point they rollover to GOR shares (is that right? See Stephanie's example here) https://www.ato.gov.au/Forms/Guide-to-capital-gains-tax-2021/?page=37
if I understand this correctly, when you sell your new GOR shares post-takeover, the cost base of those GOR shares for CGT purposes will be the value of the DGO shares at point of the takeover (e.g. $3.55) rather than what you originally paid for the DGO shares (for me, 40c).
If you are a longtime holder of DGO, you are sitting on 10 bags of profit, and a hefty CGT liability, this is great incentive. So older holders should support this takeover proposition, as I have, newer holders will be less motivated in this regard.
ATO scrip rollover CGT relief kicks in only if >80% of the scrip rolls over for the new scrip in a takeover. Under the current takeover deal, GOR gets DGO only if they get 80% rolling over, otherwise the deal is off.
This is not a coincidence IMO. This takeover is partially about some big, old holders, exiting with favourable CGT conditions
All IMO/DYOR/possibly wrong as I am not a tax expert- get proper advice
DGO Price at posting:
$2.91 Sentiment: Hold Disclosure: Held
