Norwegian shareholders were required to keep track of a so-called risk adjustment when calculation capital gains taxes between 1992 and 2006. An overview of the annual risk adjustment is provided as well as the impact on the risk adjustment of the Yara demerger 24 March 2004.
All the per share amounts on this page have not been adjusted to reflect the 5 for 1 share split effective 10 May 2006.
The revised cost basis for the Hydro and Yara share per 1 January 1992 is NOK 131.49 and NOK 12.22 per share respectively.
Yara International ASA was demerged from Norsk Hydro ASA on 24 March 2004 and all shareholders in Norsk Hydro ASA received one share in Yara International ASA for each share they owned in Norsk Hydro ASA on this date.
When these shares are sold at a later point in time the calculation of gain or loss will be based on the cost basis for each of these shares. The Norwegian tax authorities have decided that the cost basis for each of this shares will calculated by allocating 91.5 percent of the gross costs basis for the Hydro share prior to the demerger to the new Hydro share and he remaining 8.5 percent to the new Yara share. Accumulated risk adjustments will be allocated in the same way and are shown in the table above.
Certain exceptions apply if the Hydro share was sold between the demerger date 24 March 2004 and Hydro’s Annual General Meeting date on 11 May 2004. If the Hydro share was sold during this period, NOK 11 per share should be added to the cost basis to reflect the dividend. A corresponding adjustment should not be made for the Yara share if this share was sold during this period.