Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The original interest holder can obtain only a partial roll - over if its * capital proceeds for its original interest include something (the ineligible proceeds ) other than its replacement interest. There is no roll - over for that part (the ineligible part ) of its original interest for which it received ineligible proceeds.
(2) The * cost base of the ineligible part is that part of the cost base of your original interest as is reasonably attributable to it.
Example: Ken owns 100 shares in Aim Ltd. Those shares have a cost base of $2.
Ken accepts an offer from LBZ Ltd to acquire those shares. The offer is 1 share in LBZ (market value $4) plus $1 for each Aim share.
Ken chooses the roll - over to the extent that he can.
The cost base of the ineligible part is [$100  $200]  $500  $40.
Ken makes a capital gain of $100 ï€- $40  $60.