the longer you wait rio the more it will cost, page-8

Cliff,

I checked into this to make sure, if you do not get cash, only scrip, then no CGT. Of course if you sell the Rio shares then the CGT is calculated from your original input of cash. So cash $X for EXT shares – takeover - Sell Rio shares for cash $(X+Y) and therefore CGT is paid on the profit of $Y.

This is in the ATO website. Go to http://www.ato.gov.au/individuals/content.asp?doc=/content/36712.htm&page=1#P16_2539 and all will be revealed.

Particular text of interest is:

“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. The same applies to units in a trust. Note that you have to deduct any capital losses (including unapplied net capital losses from earlier years) from your capital gains before applying the CGT discount.”