Forum Archive Index - September 2000

[Brian Gale <brigale@i4free.co.nz>]

Hello Risk

In answer to your questions:-

Profit is Sell Price - Buy Price.......in your case say sell 20 cents buy 
0  Profit = 20 cents.
The fact that you obtained them free just means a 0 buy price.

Imputation credits relate to dividends....nothing to do with share price 
valuations. In your case as there is no dividend there it doesn't mean 
anything.  If a dividend is obtained the imputation credit is a tax refund 
which can be claimed on your tax return.  This is because the tax has been 
already paid  by the company in the method they have used to pay out dividends.

Regards
Brian


At 08:16 13-09-00 +1200, you wrote:
>Yes, I also received these shares, and have been watching their meteoric
>rise since august.
>They have more than doubled in value since then!
>
>I have a tax question regarding selling this or any other share that I
>received for "free":
>
>I am a trader, so I purchase shares for the sole purpose of making a profit.
>But i did not purchase AMV....they were given to me (in this case by a
>company i did purchase, but it could just as easily have been given to me by
>a relative etc)
>If I sell these shares, do I have to pay tax on the capital gain (which
>basically means tax on the whole amount, since they cost me nothing)???
>
>Also, sometimes when I receive 'free' shares, I get a letter saying they are
>treated as a NIL dividend and carry no imputation credits.  What exactly
>does this mean in relation to selling them and the taxation on this???
>
>any answers or comments will be greatly appreciated.
>
>thanks
>
>Rick
>
>
>
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