Return of Capital for Incitec Pivot (ASX:IPL) - how to handle in Sharesight?

Today IPL have released a $500 million Return of Capital via a $0.1557 per share capital reduction.

I’m wondering what I have to do in Sharesight to accurately reflect this? At the moment I have an automatic notification in the UI of a negative $$ balance of the value of my holding that the app wants me to approve, but shouldn’t the reduction in capital per share show a positive increase in the value of my holding?

I have also purchased multiple batches of shares for this company, so do I just go in and edit the ‘buy price’ down or something?

Am confused with the way Sharesight is attempting to handle this.


You’ve probably had a response or worked it out, but FWIW.

You process the ROC as a Return of Capital Trade - visible from the Trade type drop down box when adding a trade.

A ROC will reduce the cost base of your holding - it doesn’t increase its value. And yes it is possible to have a cost base reduced to zero and any further capital return beyond zero will be a CGT event. As I understand sharesight’s process, each parcel will be prorated by the total $ROC. If any parcel goes below zero as a result, you will have a “Unallocated Capital Return” which will show up in your sharesight CGT report.

Sharesight is not entirely correct in how it handles some of the corporate actions and similar non-standard stuff as the processing is fairly generic but doesn’t necessarily capture the specifics of each action. IPL is simple enough so it works ok. Best advice is if you don’t understand it, then a good accountant may be advisable. Even when you do, the same advice may still apply. I can think of at least 3 specific ASX listings where this generic processing has been an issue wrt tax.

Good luck, it’s tax time.