Telstra Shares – Cost Base for Capital Gains
Are you a Telstra shareholder looking to sell the shares that you purchased as one of their public offers?
Telstra 1
If you purchased Telstra 1 Shares in 1997, your original instalment was $1.95 on 3/11/1997, and the second instalment of $1.35 was on 13/11/1998. The total purchase price was $3.30 bought on 3/11/1997.
Telstra 2
If you bought Telstra 2 Shares in the second offer in October 1999, the original instalment for public applicants was $4.50 on 15/10/1999, and the second and final instalment of $2.90 was on 2/11/2000. The total purchase price was $7.40 for the two instalments being bought on 15/10/1999.
Telstra 3
For Telstra 3 Shares, the Telstra T3 consisted of an initial payment of $2.00 per share, with shares allotted on 24th Nov 2006, followed by a final instalment payment of $1.60 per share by 29th May 2008. On 10th June 2008, shareholders are issued ordinary Telstra Shares (TLS).
In addition, eligible shareholders who have held their instalment receipts since the issue, are issued a bonus share for every 25 they hold. Due to bonus shares, the purchase price of each share is reduced to $3.46 per share. For example, if you have 1,000 shares plus the 40 bonus shares, your calculation would be $3,600 / 1040 shares = $3.46 per share.
Prepayments of the final instalment were available on the Telstra 3 shares, and if prepayments were made, then the final instalment was discounted to $1.30 per share, and the bonus share was still issued. So based on the 1,000 shares in the first example, the cost base will be $3.17 per share, $3,300 /1040 shares = $3.17 per share.
Broker Service
If you bought the shares via a stock broker service, keep in mind that the cost base of Telstra shares for capital gains purposes is the original purchase price of the shares, including any associated transaction costs such as brokerage fees or stamp duty. It is essential to keep accurate records of the cost base, as it is used to calculate capital gains or losses when you sell the shares.
Capital Gains Calculation Example
When shares are held for longer than 12 months, a 50% discount on the capital gain is applied for Australian tax residents. In this case, if 1,000 Telstra 1 shares were sold for today’s price (February 2023) of $4.18, the capital gain calculation would be as follows:
Proceeds from the sale: 1,000 x $4.18 = $4,180 Cost base: 1,000 x $3.30 = $3,300 Capital gain: $4,180 – $3,300 = $880 Discounted capital gain: $880 x 50% = $440
Therefore, the discounted capital gain for 1,000 Telstra 1 shares sold at today’s price of $4.18, held for longer than 12 months, would be $440. This discounted capital gain would be subject to tax at the investor’s marginal tax rate.
13 thoughts on “Telstra Shares – Cost Base for Capital Gains”
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Whist an employee of Telstra at the time I bought shares when they first became available. I bought more shares the next time they became available. Unfortunately I cannot find much in the way of documentation so I am not sure of how many shares I bought each time. I also don’t know what the share price was when I bought them. I sold them all (3560) at the end of 2021. As an age pensioner with no other income I have not submitted a tax form in years. The ATO has sent me a letter asking if I made a capital gain on the sale. If there was a gain it would be pretty small. How much would a capitail gain have to be for me (no income other than age pension) to have to pay the tax?
Hi Michael,
I’m going to make a lot of assumptions with this, but hopefully, it will help you.
– You sold 3560 shares at 4.20 in December 2021, net amount from the sale of $14,952.
– You bought 2000 shares in the first offer, 2000 shares at $3.30 costing $6,600.
– You bought the rest in the second offer, 1560 shares at $7.40 costing $11,544.
Your loss, in this case, would be $3192 (Sale 14952 less first offer 6600 less second offer 11544).
Let’s say you bought all the shares at the lowest price of $3.30 would have a purchase price of $11,748.
The gain would be the sale price of $14952 less $11748 being $3204.
As you owned the share for longer than 12 months a 50% discount is applied to the $3204, making $1602 your taxable gain.
If the Aged Pension is your only income no tax would be paid on that, you can earn roughly $30k as a pensioner before you need to worry about paying tax.
Hope this helps, I have made a lot of assumptions, so treat it as a very rough guide.
Regards
Geoff
Hi there, I was using the above for calculation of my T3 shares I bought back in 2008 and cleaning up this weekend I found the original Instalment Receipt holder letter. It actually states in the letter that you may prepay the final instalment and will pay the amount less any prepayment discount, however if you choose to prepay you will not be eligible to receive Bonus Loyalty Shares on those instament receipts. This seems to conflict with what you state above and I’m wondering if I am missing another piece of paper – can you please confirm 100% the prepayment discount and bonus worked together? Thanks heaps.
I wasn’t aware that you could pay for the shares and receive a discount on the purchase price and not get the bonus shares. If that was the case in your situation you will need to calculate the cost base in regards to your circumstance and not what is on this web page.
I would assume if you took the discount instead of the Bonus Shares the cost base may be the same.
Could you please advise price of Telstra shares as at 24/7/01 and 08/05/02. My father bought these shares and upon his death were left to my brother, myself and his partner. Have contacted Link Marketing who advised the above dates but did not provide price per share. My father died on 22/12/2007 and shares were transferred into our names on 22/11/08. Your help would be appreciated.
Judy
Judy, I just Googled “Telstra’s share price history”. 22/7/2001 the price was $4.85 and 05/05/2002 the price was $4.73. I know these prices are not on the dates you are looking for, but it was nearly 20 years ago. The link I got the shares prices from https://au.investing.com/equities/telstra-corporation-limited.-historical-data You should go there and double check my figures.
Hi how can I check how much my shares are worth
Regards
Jennifer, visit their website and multiply the number of shares by the current share price. Today the shares closed at $3.87, so if you had 1000 shares they would be worth $3,870
https://www.telstra.com.au/aboutus/investors/share-price
Where would I be able to get a copy of my
final payment for first installment form for T2 shares that I have sold, I have the final payment notice for the final instalment. I have contacted Link market services they can’t help as they have no information copy of paper work on the first instalment payment of $4.50
The Telstra Share Registry is LinkMarket: telstra@linkmarketservices.com.au, or visit their website http://www.linkmarketservices.com.au/telstra
I am trying to locate my shares. Can you help.
With thanks
V McCutcheon
Sorry unable to help, most companies have a contact in regard to their share registry. If you know what shares you own you will then be able to contact the appropriate company and change you details.
I received a letter and application form from National Capital Corporation Pty Ltd (NCC)in Loganholme, QLD offering to buy my existing TESLTRA 2 shares (600 for $1902).
Can you please advise whether this is a Bona Fide company you are familiar with and whether it is safe to proceed with this transaction? Their offer closes 10 Jan 2011.
Yours sincerely
Silvio Rivier