Calculating Capital Gains

What is the price I should use to calculate capital gains if I were to sell Domain Holdings? I received shares as part the split from Fairfax.

Thanks

A: Thanks for the question.

Your cost base for each Fairfax share held will be reduced by $0.233.

Your cost base for each Domain share will be very close to $2.33 (ie 10 times $0.233). See below from the Fairfax website:

Tax Information – FXJ and DHG

For eligible FXJ shareholders issued DHG shares under the scheme of arrangement, as at the Implementation Date of 22 November 2017:

  • The tax cost base of FXJ shares should be reduced by $0.233 per share.
  • The tax cost base per DHG share can be calculated by taking your Capital Reduction Entitlement ($0.233 times by the number of FXJ Shares held on Scheme Record Date) and dividing it by the number of DHG shares received. Subject to rounding, your DHG shares should have a tax cost base of approximately $2.33 per share.
  • The Scheme Record Date is 7:00pm on 17 November 2017.
  • For further questions relating to your holding – please contact the Fairfax Shareholder Information Line on +61 1300 888 062 between the hours of 8.30am and 5.30pm (Sydney time), Monday to Friday.”

regards


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