This week’s dual listing on the JSE and Euronext Amsterdam of newly merged Nepi Rockcastle Plc — now the JSE’s largest property stock with a market cap of about R93bn — will create plenty of upside for both sets of shareholders. However, the deal has significant tax implications for SA investors. Individual shareholders of the two Central and Eastern Europe-focused rand-hedge counters will be particularly hard hit — some more than others, depending on how they choose to receive their share allocation in the merged entity. The deal doesn’t have immediate adverse tax implications for shares held in the name of a company or pension fund. Java Capital director Andrew Brooking, Nepi Rockcastle’s corporate adviser and JSE sponsor, says there was unfortunately no way to implement the merger without triggering a tax cost for individual shareholders. "Because this is a merger between two offshore companies, someone was always going to pay tax," says Brooking. SA’s taxation laws, he notes, do...

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