How to handle the Sierra Rutile Holdings Ltd (SRX:ASX) demerger from Iluka Resources Limited (ILU:ASX)

ILU:ASX shareholders will receive 1 SRX share for every 1 share in ILU owned. The steps to handle at this stage are:

Add SRX using an opening balance trade at 0 cost for the moment. It looks like they are yet to announce the ATO class ruling to determine the cost base allocation ratio for these holdings. Once the ratio has been published the cost bases need to be updated for both these holdings as below.

  1. Add a cost base adjustment to Illuka (for this the capital reduction ratio is required)
  2. Note down the reduced cost base amount.
  3. Update the cost base of the opening balance trade added for SRX. It should be the reduced cost base amount from Illuka.

Because the class ruling is yet to be announced, the steps above may change, I’ll update this thread if that is the case :+1:


@Jack_Sharesight it looks like the ruling has been released. Are you able to document the steps required?

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Bump, has there been any further update on how to handle this?

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Here you go:

  1. See this help doc for how to input a demerger

  2. Link to SRX tax ruling
    SRX ATO tax ruling

  3. How to adjust the entry for the iluka holding
    -Go into the dummy entry (assuming you raised one - if you haven’t input is as per the pic)
    -change the demerger calc numbers to
    This holding: 96.52
    New holding: 3.48
    -take note of the calculated cost base reduction (to be used in next step
    -save the trade

  4. Go into Opening balance trade for SRX (if if you haven’t done it - create it) and input the total cost base amount you copied from Iluka trade

Hope that helps