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10c gap between TAS and EDE, page-4

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05/05/16

16:11

Post #: 17687491
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Originally posted by miner86 ↑

as posted before this would means there is a 30% gap atm but this does only work if people have held EDE for longer than a year if not it is worth 110%

Zen solved the puzzle. how negligent were we! in my opinion, TAS has a tax disadvantage, which would explain the discount to EDE if EDE is taken over, EDE shareholder investors (not traders) who have held shares for over 12 months receive a 50% CGT tax discount. for example, the average share purchase price is around 5 cents (i.e., issued capital in the balance sheet divided by share on issue). if EDE was taken over for $1 per share, the average capital gain would be 95 cents; CGT tax payable at highest rate would be 22 cents. net gain to investor shareholder is 73 cents if EDE is taken over for $1 per share, TAS would receive $592M. the TAS share capital would (on current terms) be around $35M. TAS would make a profit of $557M or $1.23 per share. as a company, TAS receives no CGT discount. Under section 44 (ordinary case) or 47 (company liquidation) of the ITAA 1936, this $557M profit distributed to shareholders would probably be treated as a dividend (rather than a capital return). shareholders would receive a fully franked distribution of 86 cents. shareholders paying the highest rate of tax would receive a 37 cent franking credit but would also have to pay an additional 21 cents tax. net gain to shareholder is 65 cents therefore, factoring in the highest tax rate of 47%, the TAS share price should be 90% of the EDE share price note: this is not professional tax advice. it is just a fallible Hot Copper post please contact your accountant or tax agent or professional advisor Example 1: final liquidation distribution with a deemed subsection 47(1) dividend component 20. Bill acquired 100 shares in XYZ Pty Ltd in 1987. XYZ Pty Ltd went into liquidation. Bill's shares have cost bases totalling $10,000 at the time they end on the company's ceasing to exist in September 1999. Bill receives a final liquidation distribution on 1 July 1998 of $18,000 of which $7,000 is deemed to be a dividend by subsection 47(1) of the ITAA 1936. Bill makes capital gains in the income year ended 30 June 2000 of $1,000 (that is, $8,000 [$18,000 - $10,000] less the amount of $7,000 assessed as a dividend under subsection 44(1) of the ITAA 1936). 21. If the subsection 47(1) deemed dividend had been $9,000, Bill would have made no capital gain or capital loss on the ending of his shares. http://law.ato.gov.au/atolaw/print.htm?DocID=TXD/TD200127/NAT/ATO/00001&PiT=99991231235958&Life=20011107000001-99991231235959 INCOME TAX ASSESSMENT ACT 1936 - SECT 47 Distributions by liquidator (1) Distributions to shareholders of a company by a liquidator in the course of winding-up the company, to the extent to which they represent income derived by the company (whether before or during liquidation) other than income which has been properly applied to replace a loss of paid-up share capital, shall, for the purposes of this Act, be deemed to be dividends paid to the shareholders by the company out of profits derived by it. (1A) A reference in subsection (1) to income derived by a company includes a reference to: (a) an amount (except a net capital gain) included in the company's assessable income for a year of income; or (b) a net capital gain that would be included in the company's assessable income for a year of income if the Income Tax Assessment Act 199 http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/s47.html
Zen solved the puzzle. how negligent were we! in my opinion, TAS has a tax disadvantage, which would explain the discount to EDE if EDE is taken over, EDE shareholder investors (not traders) who have held shares for over 12 months receive a 50% CGT tax discount. for example, the average share purchase price is around 5 cents (i.e., issued capital in the balance sheet divided by share on issue). if EDE was taken over for $1 per share, the average capital gain would be 95 cents; CGT tax payable at highest rate would be 22 cents. net gain to investor shareholder is 73 cents if EDE is taken over for $1 per share, TAS would receive $592M. the TAS share capital would (on current terms) be around $35M. TAS would make a profit of $557M or $1.23 per share. as a company, TAS receives no CGT discount. Under section 44 (ordinary case) or 47 (company liquidation) of the ITAA 1936, this $557M profit distributed to shareholders would probably be treated as a dividend (rather than a capital return). shareholders would receive a fully franked distribution of 86 cents. shareholders paying the highest rate of tax would receive a 37 cent franking credit but would also have to pay an additional 21 cents tax. net gain to shareholder is 65 cents therefore, factoring in the highest tax rate of 47%, the TAS share price should be 90% of the EDE share price note: this is not professional tax advice. it is just a fallible Hot Copper post please contact your accountant or tax agent or professional advisor Example 1: final liquidation distribution with a deemed subsection 47(1) dividend component 20. Bill acquired 100 shares in XYZ Pty Ltd in 1987. XYZ Pty Ltd went into liquidation. Bill's shares have cost bases totalling $10,000 at the time they end on the company's ceasing to exist in September 1999. Bill receives a final liquidation distribution on 1 July 1998 of $18,000 of which $7,000 is deemed to be a dividend by subsection 47(1) of the ITAA 1936. Bill makes capital gains in the income year ended 30 June 2000 of $1,000 (that is, $8,000 [$18,000 - $10,000] less the amount of $7,000 assessed as a dividend under subsection 44(1) of the ITAA 1936). 21. If the subsection 47(1) deemed dividend had been $9,000, Bill would have made no capital gain or capital loss on the ending of his shares. http://law.ato.gov.au/atolaw/print.htm?DocID=TXD/TD200127/NAT/ATO/00001&PiT=99991231235958&Life=20011107000001-99991231235959 INCOME TAX ASSESSMENT ACT 1936 - SECT 47 Distributions by liquidator (1) Distributions to shareholders of a company by a liquidator in the course of winding-up the company, to the extent to which they represent income derived by the company (whether before or during liquidation) other than income which has been properly applied to replace a loss of paid-up share capital, shall, for the purposes of this Act, be deemed to be dividends paid to the shareholders by the company out of profits derived by it. (1A) A reference in subsection (1) to income derived by a company includes a reference to: (a) an amount (except a net capital gain) included in the company's assessable income for a year of income; or (b) a net capital gain that would be included in the company's assessable income for a year of income if the Income Tax Assessment Act 199 http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/s47.html

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It is nowhere as complicated as that. It is simply the question as to how the profits of Edencrete would benefit either companies shareholders. For any distribution to shareholders TAS would get their share as a shareholder but through Noble. EDE shareholders would get theirs direct. The benefits going to Noble would not go to TAS 100% then it is a case of what will be allowed to trickle down to TAS shareholders, certainly again not 100%.

I suggest that a takeover will not occur but a sale of the Edencrete business may sometime occur.

Anything along these lines is nothing but speculation. Speculation that has been discussed here on numerous occasions.

TAS Price at posting: 15.5¢ Sentiment: Buy Disclosure: Held
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Last 0.5¢		Change 0.000(0.00%)		Mkt cap ! $4.026M

Open	High	Low	Value	Volume
0.0¢	0.0¢	0.0¢	$0	0

Buyers (Bids)

No.	Vol.	Price($)
1	221958	0.4¢

Sellers (Offers)

Price($)	Vol.	No.
0.5¢	4785706	4

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No.	Vol.	Price($)
1	71571	0.040
1	16035	0.039
3	215789	0.038
1	200000	0.037
2	80000	0.036

Price($)	Vol.	No.
0.044	50000	1
0.045	127874	1
0.048	125145	2
0.052	27200	1
0.055	10000	1

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