Aussie Dopers - Telstra Buy-Back Scheme Question

Factual Questions
1

So I received in the post my copy and forms for the Telstra Buy-Back Scheme.

  1. If I choose to sell my shares on the share market, I will receive market price, minus any broker fees. No rocket science there.

  2. If I choose to participate in the buy-back, and my buy-back offer is accepted, do I receive that full share value? I mean, since I don’t file for Oz income tax, and the buy-back scheme is a split between a AUS$1.50 capitol price and the rest as a fully franked, do I still receive the full buy-back amount?

The Telstra booklet is typically vague and obfuscated.

2

A single bump to catch any Aussie Dopers. It will not be repeated.

Thanks for your help.

3
  1. Yes, you get it all. I assume you’d have to pay capital gains tax on it somewhere though.

FWIW, my thinking is that the reason Telstra are doing the buyback is they believe their own shares are a good investment; that is, that the price will later rise above the buyback price. So I’m keeping mine.

4

$1.50 - $7.40 = -$5.90. No capital gain.

The franking credits are useless to you. If you have to pay any tax on the dividend component, then you’re worse off than if you just sold the shares through your broker.