Tax implications of renounceable entitlement.

Just wondering how payments of renounceable entitlements in an investment portfolio are treated for tax purposes.
For example the entitlement MOV shareholders would have had not participating in the November 2021 capital raising?

Quote:

Originally Posted by forest

Just wondering how payments of renounceable entitlements in an investment portfolio are treated for tax purposes.
For example the entitlement MOV shareholders would have had not participating in the November 2021 capital raising?

Pretty sure it is seen as a sale of part of the shareholders interest in the equity of the company and would be taxed on the same basis as a sale of shares in the company (i.e. on capital account unless the shares were purchased with the intention of resale or held as part of a share trading business).

As the funds are not coming from the company itself, it’s not a distribution that would be taxed as a dividend. If it were taxable as a dividend, you would expect to see RWT deducted when paid out.

Not professional advice, but I concur with Southern Lad's comment.

Thanks Southern Lad and Beagle for your replies.