Shareholders may have a CGT obligation if their company is taken over or merges with another company and they have to dispose of their shares. This happens if the scrip-for-scrip conditions are not satisfied. The Capital Proceeds for the original shares include the market value of the new shares plus any cash received.

The most prominent recent takeover where rollover relief was not available was the case of the Xstrata takeover of MIM Holdings Ltd on 24 June 2003 as MIM shareholders received only cash of $1.72 per share and disposed of their shares.

If scrip-for-scrip rollover conditions are satisfied the takeover company will usually advise shareholders and the crystallisation of the capital gain can be deferred until a later CGT event occurs. If some cash is received, however, the relief is only available on the scrip portion and the cost base of the original shares needs to be apportioned between the cash and the replacement shares.