The Swedish Tax Agency’s Notices
Information from the Swedish Tax Agency concerning allocation of SKV M
acquisition costs for shares as a result of Hexagon AB’s distribution 2008:13
of shares in HEXPOL AB in 2008
Hexagon AB (”Hexagon”) has stated the following.
On 5 May 2008, a resolution was adopted at the Annual General Meeting of Hexagon to
distribute to the shareholders all the shares in the wholly-owned subsidiary HEXPOL
For every ten (10) shares in Hexagon of class A or class B respectively, one share in
HEXPOL of the corresponding class was received. If the holding of class B shares was
not evenly divisible by ten, the corresponding fraction of one share was received. Such
fractions of shares in HEXPOL were accumulated to make up whole shares and then
sold collectively, whereupon the payment was paid out to the shareholders concerned.
The record day for the receipt of shares in HEXPOL was 5 June 2008.
The final day for trading of shares in Hexagon with the right to participate in the
distribution was 2 June 2008.
The benefit for a shareholder to receive shares in another company free of charge is
taxed as dividend income. However, the dividend is tax exempt if certain conditions are
The Swedish Tax Agency has replied in writing on 17 April 2008 that it considered the
conditions for the dividends to be covered by the rules on tax-exemption (Lex Asea) to
be fulfilled. In such case, the dividends shall not be taxed. Instead, the acquisition cost
for the shares in Hexagon shall be divided between such shares and the shares received
in HEXPOL. By this, the devaluation of a share in Hexagon brought about by the
distribution will be attributed to the distributed shares in HEXPOL. The remainder of
the acquisition cost for the share in Hexagon becomes the new acquisition cost for such
The class B shares in Hexagon are listed on the OMX Nordic Exchange Stockholm,
whereas the class A shares are not subject to any market trading. Accordingly, in
conjunction with the allocation of the acquisition cost for both classes A and B shares,
the price fluctuation for the class B shares should constitute the basis of all the
The final day for trading of class B shares in Hexagon with the right to distribution of
shares in HEXPOL was 2 June 2008. The lowest quoted price for class B shares in
Hexagon on that day was SEK 121. The first day for trading of such shares without the
right to redemption was 3 June 2008, and the lowest quoted price that day was SEK
Therefore, (113.75 : 121 =) 94 per cent of the original acquisition cost for the shares of
class A or B in Hexagon should be attributed to the shares in Hexagon and 6 per cent
should be attributed to the acquired shares and fractions of shares in HEXPOL.
The acquisition cost for ten shares in Hexagon, at the time of the distribution of shares
in HEXPOL, is assumed to be SEK 500 (SEK 50 per share). 94 per cent of this amount
or (0.94 x 500 =) SEK 470 shall be attributed to the ten shares in Hexagon (SEK 47 per
share), and 6 per cent or (0.06 x 500 =) SEK 30 to the share in HEXPOL.
The Swedish Tax Agency has issued general advice concerning the allocation of
acquisition costs; see SKV A 2008:16.