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.
Thanks.
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.
Thanks for this posted - it nearly answers my question…
On 28-Aug-2013 I purchased 2400 Boral (BLD:ASX) and then received a “Return of capital” of $2.65 on 4-Feb-2022 which I confirmed in Sharesight.
According to Link Market Services, on 4-Jul-2024 there was a “Takeover Consideration Allotment” that reduced my shareholding to zero.
Should this have been picked up by Sharesight to reduce my shareholding to zero?
How should this be correctly represented in Sharesight?
Hi @c0utta according to this source you have to add a return of capital entry for Boral at $$1.44 per share and use the merge feature to convert Boral to SGH at the ratio 1 Boral : 0.1116 SGH Shares.
You also have to add a dividend for Boral at $0.26 per share. Record date for the transaction is 18 April 2024.
Please get in touch with our support if you need any further support on this.
Hi Piumi,
I think I understood what to do, so I:
- Return of capital for Boral at $1.44 per share on 4-Jul-2024. Since I have 2400 shares, this was $3456
- Sharesight had already added the $0.26 Boral dividend which I confirmed
- Merge Boral into Seven Group Holdings (SVW) at a ratio of 1:0.1116 on 4-Jul-2024. This equated to 268 SVW shares
One thing I don’t understand is I had expected my new holding to be present within Boardroom, but I can’t see it there. Although I am taking it up with Boardroom, do you have any insight?
Thanks for your help,
Cheers
Hi @c0utta you are correct on the steps, just check if the record date is correct as it should be 18 April as per the published sources.
Not sure why it’s not showing up in Boardroom, have you received any response from them?