Capital Losses 2018/2019

 

 

THIS WEBPAGE APPLIES TO THE YEAR ENDED 30 JUNE 2019. IT MAY BE USEFUL IN PREPARING TAX RETURNS FOR THAT YEAR. THE CURRENT YEAR'S TAX POSITION IS HERE STATUS FOR TAX YEAR 2020/21."

Shareholders and their advisers should read this web page if they are interested in the availability of tax losses in 2018/19.

deListed monitors distressed and failed companies constantly and is uniquely qualified and licensed (Australian Financial Services License 334036) to provide this specialised service.

We cover below the securities of companies suspended from quotation, delisted, unlisted and/or in external administration. We will acquire such securities in a valid "arms length" transaction if you wish to realise your loss for capital gains tax purposes.

If you are unable to find your company in one or other of the schedules below, even though it is suspended from quotation, please email us to admin@delisted.com.au with the full and exact name and code of your company.

There are four categories of capital loss companies in 2018/19:

 

1. Loss declarations issued this year 

A loss declaration has been issued during 2018/19 for the following companies and shareholders can choose to make a capital loss in the 2018/19 income year: 

This table is updated throughout the year as soon as we become aware of the issue of a loss declaration. You will need to go to the individual company's record (see News & Events) on this website to download the declaration.

  

2. Loss declarations issued in previous years  

If shareholders did not choose to make a capital loss for the following companies in the income year the declaration was made, they can do so now only by disposing of their securities:

 We recommend shareholders consider disposing of their securities in the above companies, which they can do so quickly and simply at "Sell your worthless shares". The alternative is to wait until the company is deregistered before claiming the loss, but you should be aware that deregistration may not occur for many years.

 

 3. Worthless share companies
         (this is now our current list!)

Since 2003 we have prepared an annual list of capital loss companies. Each year it is provided here and circulated to stockbrokers, fund managers, investors and others, Australia-wide. This year we have reviewed the financial position of about 235 relevant companies in order to produce the following list. Please scroll down to check if your company is on the list.

 

Securities in the above companies are of little, if any, value in our view. Eligibility is determined by reference to the circumstances leading to a delisting or suspension, the length of a suspension, share trading history and last on-market share price, most recent financial and cash flow statements, prospects (including likelihood of re-financing) and other factors. If "Status" is "Former Name" click on the company's name to ascertain its current name. The crystallisation of a capital loss usually makes good economic sense and we suggest shareholders consider disposing of their securities in these companies, which they can do so quickly and simply at "Sell your worthless shares".

 

 

4. Securities quoted but no longer trading

There are a number of listed companies that are no longer trading because their shares are virtually worthless. If you wish to realise a loss please contact us (admin@delisted.com.au) to determine if the security is eligible.

 

 

5. Other Companies 

If your company has failed or is delisted or suspended from quotation and does not feature in any of the above categories it is likely that:

• The company is suspended from quotation temporarily and we believe it will regain quotation (or perhaps be taken over) without substantial loss of value. You should go to the individual company record on our website and view News & Events and/or ASX Announcements to confirm or email us to admin@delisted.com.au. 

or

• The company has been deregistered and the capital loss can be claimed, providing of course it has not previously been claimed. (note that the capital loss is only made in the year the company is deregistered - which also means if is not applied against a capital gain in that year, it is carried forward.) See our " Deregistered Companies" webpage for a list of deregistered companies. There is a small fee to see the whole list but you can usually find an individual company's deregistration status by searching on the company and going to its record.

or

• A liquidators or administrators declaration has been issued in a previous income year and the company is now in liquidation (as distinct from "in administration"). If you did not choose to make a capital loss when the declaration was made you will have to wait until the company is deregistered before you can claim your loss. Our Loss Declarations webpage features many of these companies. There is no fee to view this.

Recapitalisation and requotation

Many shareholders have asked us about the possible value of their shares if their company is restructured and able to regain quotation. In our experience the residual value of an average shareholding has been negligible in such circumstances. The best way to demonstrate this is to take two prominent companies that were recapitalised and subsequently regained quotation:

Western Metals Limited (now Indago Resources Limited (IDG) – As part of the restructuring, this company’s shares were consolidated, with existing shareholders receiving 1 share for every 100 they held previously. The shares came back on the market in December 2005 at about 2.3 cents and an “average” shareholding of say 50,000 shares acquired at 28 cents* each (cost $14,000) had thus become 500 shares, worth about $15.

Gympie Gold Limited (now Lachlan Star Limited (LSA) - As part of the restructuring, this company’s shares were consolidated, with existing shareholders receiving 1 share for every 15 they held previously. The shares came back on the market on 4 April 2006 (the company was then called Toodyay Resources Ltd) at about 2 cents and an “average” shareholding of say 25,000 shares acquired at 56 cents* each (cost $14,000) had thus become 1667 shares, worth about $34.

* average closing price over the five years prior to suspension

While any value is better than nothing, in each case shareholders who had retained their shares were still faced with having to sell a less-than-marketable parcel to crystallise their capital loss. Clearly it was in shareholder's interests to dispose of their shares and take the tax benefit of the loss immediately.

Transfer of securities

Shareholders should be aware that some of the companies in the above schedules are in administration. While s437F of the Corporations Act restricts the transfer of shares in such companies, the Australian Taxation Office has determined that in certain circumstances the capital loss can be crystallised. Our documentation and process has accomplished this for thousands of transactions since tax year 2003/04. We are not aware that any claim has ever been disallowed by the ATO.

Shareholders seeking further background should see our Loss Declarations, Deregistered Companies and Capital Gains Tax Basics webpages.