💼 CGT and Multiple Share Mergers
💼 CGT and Multiple Share Mergers
What you need to know when your shares merge
When your shares go through one or more company mergers, it can be confusing to figure out how this affects your Capital Gains Tax (CGT). The good news is — in most cases, you won’t have to pay tax straight away.
🔄 What Happens When Companies Merge
When two companies join together, your old shares are usually swapped for new ones in the merged company.
In most cases, you don’t have to pay CGT at the time of the merger. Instead, the ATO allows you to carry over your original purchase cost and purchase date to the new shares.
This means you only deal with CGT later — when you actually sell the new shares.🧾 When You Sell Your Shares
You’ll only need to calculate CGT when you sell your new shares. Here’s how:
Carry forward your original cost. The price you first paid for your old shares becomes the cost base for the new ones.
Keep your original purchase date. This helps you qualify for the 50% CGT discount if you’ve owned the investment for more than 12 months.
Report the sale properly. When you sell, include the sale amount and your cost base in your tax return to work out your gain or loss.
If you’ve had multiple mergers, keep copies of:
Original purchase and sale records
Company merger or takeover documents
Any statements explaining how your new shares were issued
Good records make tax time easier and help you get the right CGT treatment.
Even if your shares have changed company names several times, your investment history continues — not resets.
When you eventually sell, your CGT will be based on what you originally paid and when you first bought the shares, as long as the merger allowed you to carry over those details.
