I’m considering the AGL renounceable entilement offer (AGKRA) for our SMSF high income portfolio (developed on your rules).
I am 49 and my partner in the fund (and life) is 38.
As such, any share holdings are viewed as a long-term strategy. We also own a similar high income portfolio in our private names. As a new trader, I haven’t seen this sort of offer before. We are self-employed and we are in the lower tax bracket. The questions I have are:
- The SMSF fund has more cash than we do personally, I’d consider transferring our personal entitlement to the fund to fully take advantage of the offer. What are our personal tax implications of doing this?
- Is it worth it? AGK closed Friday at $13.59, the offer price is $11. AGKRA closed on Friday at $2.52.
- Is the offer price likely to approach $11, or even that of AGK on the market, as the retail entitlement offer date is approached (15 Sept)?
A: Thanks for the question.
I will keep it brief due to the time criticality.
- If you don’t want to take up the rights but sell them, trading on the ASX (AGKRA) ceases today Monday at 4.00pm EST.
- You cannot get your SMSF to pay for your personal entitlement – and there is not time to transfer your entitlement to your SMSF.
- Yes – I think it's worth taking them up at $11.00. If you do nothing, you will receive the net proceeds from AGL effectively auctioning your rights (referred to as the ‘Retail Premium’ – see pg. 9 of the Offer document).
- In answer to your question 3 – no, very unlikely.
