Key events for Australian shareholders 2003-04

Event summaries

AMP (share purchase plan)

What happened

• During May and June 2003, AMP offered shares to its existing shareholders via a share purchase plan
• The price of $4.82 per share was announced on 14 July 2003
• Shares were allotted to the shareholders on 18 July 2003

Tax implications

The shares will be subject to capital gains tax (CGT) if a CGT event happens to them after purchase.

For capital gains tax purposes:

• The acquisition cost of your shares was $4.82, the price you paid for them under the purchase plan.
• The acquisition date of the shares is the date you accepted the AMP offer.

Where to find more information

Phone us on 13 28 61.

AMP (demerger)

What happened

• On 23 December 2003 the Australian and New Zealand company (AMP Group) demerged its UK interests (HHG Group)
• Under the demerger
• a portion of your AMP shares were cancelled
• you were entitled to a cancellation entitlement of $5.9142238 per share
• your cancellation entitlement was compulsorily used to acquire shares in HHG
• your remaining AMP shares were split so that you had the same number of AMP shares after the demerger as before it

Tax implications

Rollover relief

Demerger rollover relief is not available.

AMP shares

For capital gains tax (CGT) purposes:

• A CGT event happened to the AMP shares that were cancelled.
• The date of the CGT event is 23 December 2003 (the date of the demerger).
• You made a capital gain if the cost base of your cancelled AMP shares was less than the cancellation entitlement ($5.9142238 per share).
• You made a capital loss if the reduced cost base of your cancelled AMP shares was more than the cancellation entitlement.

Adjusting the cost base of your shares

To work out the total cost base (or reduced cost base) of your AMP shares following the demerger, subtract the cost base (or reduced cost base) of the shares that were cancelled under the demerger from the total cost base (or reduced cost base) just before the demerger.

HHG shares

For capital gains tax purposes:

• The acquisition date of your HHG shares is 23 December 2003 (the date of the demerger).
• You received the same number of HHG shares as you had had AMP shares before the cancellation.

Working out the cost base of your HHG shares

The first element of the cost base and reduced cost base of your HHG shares is the entitlement you received for your cancelled AMP shares (which was applied to acquire the HHG shares). To work out the amount:

$5.9142238 x number of AMP shares cancelled

Where to find more information

• Read AMP group demerger: How it affects Australian resident shareholders
• Use the AMP demerger calculator to work out how the demerger affects your tax affairs
• See Class Ruling 2003/107 (Withdrawn): Income tax: AMP Limited: Demerger, capital adjustment and scheme of arrangement
• Phone us on 13 28 61

AMP (rights issue)

What happened

• On 23 Dec 2003, AMP made a rights issue in association with the demerger (see above)
• You received one right for each AMP share you held on 28 October 2003
• You were entitled to exercise the rights, at the rate of 77 cents each, to acquire more AMP shares, which cost $3.87 each
• If you did not exercise your rights, you received a payment of 8.2 cents per right

Tax implications

For capital gains tax (CGT) purposes:

(a) If you exercised your rights

• the total cost base of the AMP shares you bought under the rights offer is:
  the number of rights you exercised x 77 cents
• the acquisition date of the shares you bought is the date you paid for the rights.

(b) If you did not exercise your rights

• you made a capital gain of 8.2 cents per unexercised right
• your capital gain may be eligible for the discount if the rights attached to shares you acquired before 9 December 2002.

Where to find more information

• Read AMP group demerger: How it affects Australian resident shareholders
• See Class Ruling 2003/107 (Withdrawn): Income tax: AMP Limited: Demerger, capital adjustment and scheme of arrangement
• Phone us on 13 28 61

Bank of Western Australia (acquisition by HBOS plc)

What happened

• During September 2003, HBOS plc acquired all shares in Bank of Western Australia
• Minority shareholders received $4.25 per share

Tax implications

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your Bank of Western Australia shares was less than $4.25.
• You made a capital loss if the reduced cost base for each of your Bank of Western Australia shares was greater than $4.25.
• The disposal date of your shares is the date they were transferred to HBOS. This occurred on or about 11 September 2003.

Where to find more information

Phone us on 13 28 61.

Coles Myer Limited (share sale facility)

What happened

• Between 15 March and 23 April 2004, Coles Myer made a share sale facility available to shareholders who had 800 shares or less and whose address on the Coles Myer share registry was in Australia or New Zealand
• In April, all Coles Myer shareholders on 8 April 2004 were paid a fully franked interim dividend of 14 cents per share

Tax implications

If you received the interim dividend, you must include it in your assessable income for the year ended 30 June 2004. Also include the franking credit if you are entitled to claim it.

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your Coles Myer shares was less than the proceeds you received from the sale.
• You made a capital loss if the reduced cost base for each of your Coles Myer shares was greater than the proceeds you received from the sale.
• The disposal date of your shares is the date they were sold on the stock market.

Note: The capital proceeds from the sale of the shares may vary for shares sold on different days.

Where to find more information

• See Coles Myer Limited 2004 share sale facility
• Phone us on 13 28 61

Commonwealth Bank Australia (share buy-back)

What happened

• In March 2004, Commonwealth Bank Australia (CBA) conducted an off-market share buy-back
• You received $27.50 for each share CBA bought back from you, made up of
• a fully franked dividend of $16.50, and
• capital proceeds of $11.00*

* The ATO has determined that, for capital gains tax purposes, you are deemed to have received capital proceeds of $13.92 per share.

Tax implications

You must include the dividend in your assessable income for the year ended 30 June 2004. Also include the franking credit if you are entitled to claim it.

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your shares was less than $13.92.
• You made a capital loss if the reduced cost base for each of your shares was greater than $13.92.
• The disposal date of your shares was 29 March 2004.

Where to find more information

• Read Commonwealth Bank of Australia Ltd: 2004 off-market share buy-back
• See Class Ruling CR 2004/65 (Withdrawn) - Share buy-back: Commonwealth Bank Australia
• Phone us on 13 28 61

Foster's Group Limited (share buy-back)

What happened

• On 22 December 2003, Foster's announced that they had completed an off-market share buy-back
• The buy-back price of $4.00 a share was made up of
• a fully franked dividend of $2.19 per share, and
• a capital payment (capital proceeds) of $1.81 per share

Tax implications

You must include the dividend in your assessable income for the year ended 30 June 2004. Also include the franking credit if you are entitled to claim it.

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your shares was less than $1.81.
• You made a capital loss if the reduced cost base for each of your shares was greater than $1.81.
• The disposal date of your shares was 22 December 2003.

Where to find more information

• See Foster's Group Ltd: 2003 off-market share buy-back
• See Class Ruling CR 2004/16 (Withdrawn): Income tax: Share Buy-Back: Foster's Group Limited
• Phone us on 13 28 61

GIO (class action)

What happened

• In August 2003, a class action by former GIO shareholders against GIO directors was settled
• Shareholders who participated in the class action received compensation for the loss they made on their GIO shares as a result of following the directors' advice
• The compensation was made in two instalments, both paid in the year ended 30 June 2004

Tax implications

For capital gains tax purposes, you may treat your compensation as either:

• additional capital proceeds on the disposal of your GIO shares, or
• a capital gain in the financial year ended 30 June 2004.

Additional capital proceeds

If you treat the compensation as additional capital proceeds for the disposal you must recalculate the capital gain or capital loss on the shares for that year. If, as a result, you make a:

• Net capital gain (or increased net capital gain) - you need to request an amendment for that year.
   
• Reduced net capital loss - you need to adjust your records to reflect your decreased net capital loss amount. You may have already used the original capital loss amount in a subsequent tax return. If you now have a net capital gain (or increased net capital gain) for that subsequent year, you must request an amendment for that year.

Note: If the amendment period for any affected year has passed, you need take no further action for that year or years.

Capital gain

If you treat the compensation payment as a capital gain in the financial year ended 30 June 2004:

• You made a capital gain equal to the amount of compensation you received, and
• You must include this capital gain in your tax return for 2003-04. (If you have lodged your 2003-04 tax return and did not include this gain, you will need to request an amendment.)

Penalties

Administrative penalties do not apply and any general interest charge on the tax shortfall will be remitted in full if you request an amendment before 30 June 2005.

Where to find more information

• Read Compensation received under the GIO class action
• See Law Administration Practice Statement (GA) PS LS 2004/5 (Withdrawn): CGT treatment of an amount received by former GIO shareholders in settlement of a class action brought against GIO (Australia Holdings Ltd), its former Board of Directors and advisers
• See Taxation Ruling TR 95/35: Income tax: capital gains: treatment of compensation receipts
• Phone us on 13 28 61

Grainco Australia Ltd (GAL) (takeover)

What happened

• On 1 October 2003, GAL and Graincorp entered a scheme of arrangement under which Graincorp took control of GAL
• GAL shareholders had a choice of receiving either cash or Graincorp reset preference shares (RPS) in exchange for their GAL shares
• In either case, the value of the consideration you received was equivalent to $1.392 per GAL share surrendered

Tax implications

For capital gains tax purposes:

Rollover relief

Scrip-for-scrip rollover is available on the exchange of Graincorp RPS for GAL shares.

In the absence of the scrip-for-scrip rollover:

• You made a capital gain if the cost base for each of your shares was less than $1.392.
• You made a capital loss if the reduced cost base for each of your shares was greater than $1.392.
• The disposal date of your shares is 1 October 2003.

Where to find more information

• See Class Ruling 2004/64 (Withdrawn): Income tax: exchange of shares in Grainco Australia Limited for shares or cash in GrainCorp Limited
• Phone us on 13 28 61

Insurance Australia Group (IAG) (share buy-back)

What happened

• In June 2004, IAG conducted an off-market share buy-back
• The buy-back price of $4.40 a share was made up of
• a fully franked dividend of $2.62, and
• a capital payment (capital proceeds) of $1.78*

* For capital gains tax purposes, we deem you to have received capital proceeds of $2.16 per share.

Tax implications

You must include the dividend in your assessable income for the year ended 30 June 2004. Also include the franking credit if you are entitled to claim it.

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your shares was less than $2.16.
• You made a capital loss if the reduced cost base for each of your shares was greater than $2.16.
• The disposal date of your shares is 21 June 2004.

Where to find more information

• Read Insurance Australia Group 2004 Off-market share buy-back
• See Class Ruling CR 2004/100 (Withdrawn) - Share buy-back: Insurance Australia Group Limited
• Phone us on 13 28 61

IOOF (demutualisation)

What happened

• On 14 June 2002, the members of IOOF - a friendly society that was a mutual company - resolved to demutualise
• On 4 December 2003 IOOF listed on the Australian Stock Exchange

Tax implications

For capital gains tax purposes:

• No tax consequences arise from the cancellation of members' interests.
• The first element of the cost base and reduced cost base of each IOOF share is $2.53.
• The acquisition date of your IOOF shares is 14 June 2002.

Note: Disregard any capital loss made on your IOOF shares before they were listed on the stock exchange.

Where to find more information

• See IOOF demutualisation: impact on individual shareholders
• Phone us on 13 28 61

Jupiters Limited (takeover)

What happened

• On 13 November 2003, Jupiters Limited merged with TABCorp Holdings Limited. The merged company was called TABCorp
   
• You were offered a choice of three combinations of cash and TABCorp shares.* Whichever option you took, for each Jupiters share you received either
• $5.25, or
• 0.525 of a TABCorp share
• You were paid two fully franked dividends made up of
• a special dividend of $0.75 per share, and
• a dividend of $0.172 a share, representing the net proceeds from the sale of Centrebet

* Details of the various offers are available in the ATO fact sheet on the merger and from the TABCorp website.

Tax implications

You must include the dividends in your assessable income for the year ended 30 June 2004. Also include the franking credits if you are entitled to claim them.

For capital gains tax purposes:

Rollover relief

• Partial scrip-for-scrip rollover is available
• Rollover relief is not available for the cash amounts received

In the absence of scrip-for-scrip rollover, the cost base of your new TABCorp shares is $11.28.

Where to find more information

• Read Jupiters Limited merger with TABCorp Holdings Limited
• See Class Ruling CR 2003/89 (Withdrawn) - Scrip for scrip rollover: Merger of Jupiters Limited and TABCORP Holdings Limited
• Phone us on 13 28 61

Mayne Group (share buy-back)

What happened

• In March 2004, Mayne conducted an off-market share buy-back
• Participating shareholders received $3.55 per share made wholly from the share capital account of the company (that is, there was no dividend component in the price paid)

Tax implications

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your Mayne shares was less than $3.55.
• You made a capital loss if the reduced cost base for each of your Mayne shares was greater than $3.55.
• The disposal date of your shares is 22 March 2004.

Where to find more information

• Read Mayne Group Ltd: 2004 off-market share buy-back
• See Class Ruling CR 2004/32 (Withdrawn) - Income tax: Off-market share buy-back: Mayne Group Limited
• Phone us on 13 28 61

Mincor Resources NL (demerger)

What happened

• On 30 October 2003, Mincor Resources NL demerged its Tethyan Copper Company Limited interests
• Under the demerger, you received $0.089 for each Mincor share you held, made up of
• a demerger dividend of $0.06, and
• a return of capital of $0.029
• Both your dividend and your capital return were compulsorily used to purchase the Tethyan shares
• You received one Tethyan Copper Company Limited share for every 3.37 Mincor shares you held

Tax implications

You do not include the dividend or the return of capital in your assessable income.

For capital gains tax purposes:

Rollover relief

Demerger rollover relief is available.

You must adjust the cost base and reduced cost base of your shares whether or not you chose rollover.

Adjusting your cost base

To adjust your cost base, take the total cost base of your Mincor shares just before the demerger (not including indexation) and spread the amount across both your Mincor and Tethyan shares in the following proportions:

• Tethyan Copper Company Limited = 9.582% of the total amount.
• Mincor Resources NL = 90.418% of the total amount.

Where to find more information

• Read 2003 Mincor Resources NL demerger: impact on resident individual shareholders
• See Class Ruling CR 2003/66 (Withdrawn): Income tax: capital gains: demerger roll-over relief for shareholders: demerger of Tethyan Copper Company Limited from Mincor Resources NL
• Phone us on 13 28 61

OPSM Group Ltd (takeover)

What happened

• Between 16 June and 2 September 2003 Luxottica South Pacific Pty Limited made a successful takeover offer for OPSM
• Shareholders who accepted the offer received $3.80 cash for each OPSM share they held
• On 2 July 2003, all those who had been OPSM shareholders on 23 June 2003 were paid a fully franked dividend of 10 cents a share

Tax implications

You must include the dividend in your assessable income for the year ended 30 June 2004. Also include the franking credit if you are entitled to claim it.

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your OPSM shares was less than $3.80.
• You made a capital loss if the reduced cost base for each of your OPSM shares was greater than $3.80.
• The disposal date of your shares is
• 17 July 2003 - if you accepted the offer on or before that date
• the date you accepted the offer - if you accepted it after 17 July 2003.

Where to find more information

Phone us on 13 28 61.

Over 50s Mutual (OFM) (demutualisation)

What happened

• On 12 June 2001, the members of OFM, a friendly society, resolved to demutualise
• On 26 March 2002, OFM listed on the Australian Stock Exchange

Tax implications

For capital gains tax purposes:

• There are no tax consequences arising from the cancellation of members' interests.
• The first element of the cost base and reduced cost base of each OFM share is $1.65.
• The acquisition date your OFM shares is 12 June 2001.

Note: Disregard any capital loss made on OFM shares before they were listed on the stock exchange.

Where to find more information

• Read OFM Investment Group Limited (OFM) demutualisation: impact on individual shareholders
• Phone us on 13 28 61

Principal Office Fund (POF) (takeover)

What happened

• Between 20 June 2003 and 1 September 2003, Investa Property Group (IPG) made a successful takeover offer for POF
• Unit holders who accepted the offer had a choice of receiving all cash or a mix of cash and IPG securities. For every 12 POF units held, the offer was
• $19.13 cash, or
• seven IPG stapled securities plus $5.70 cash
• POF unit holders who did not accept the offer had their units compulsorily acquired on 2 October 2003 and received the IPG-securities-plus-cash alternative

Tax implications

For capital gains tax purposes:

Rollover relief

• Partial scrip-for-scrip rollover is available
• Rollover relief is not available for the shares or cash amounts received

In the absence of the scrip-for-scrip rollover:

• You made a capital gain if the cost base for each POF unit was less than the total value of IPG securities plus cash received in exchange for it.
• You made a capital loss if the reduced cost base for each POF unit was greater than the total value of IPG securities plus cash received in exchange for it.
• The disposal date of your POF units is
• if you accepted the offer - the date of acceptance (Note: this may be in the 2003 or 2004 income year)
• if your units were acquired compulsorily - 2 October 2003.

Where to find more information

• See Class Ruling CR 2004/78: Income tax: capital gains: scrip for scrip roll-over: exchange of units in Principal Office Fund for units in Investa Property Trust
• Phone us on 13 28 61

Seven Network Limited (share buy-back)

What happened

• On 14 December 2003, Seven Network Limited announced a buy-back of ordinary shares
• The buy-back price of $5.80 was made up of
• a fully franked dividend of $2.32 per share, and
• a capital component (capital proceeds) of $3.48 per share

Tax implications

You must include the dividend in your assessable income for the year ended 30 June 2004. Also include the franking credit if you are entitled to claim it.

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your shares was less than $3.48.
• You made a capital loss if the reduced cost base for each of your shares was greater than $3.48.
• The disposal date of your shares is 14 December 2003.

Where to find more information

• Read Seven Network Ltd: 2004 off-market share buy-back
• See: Class Ruling CR 2004/13 (Withdrawn): Income tax: Share buy-back: Seven Network Limited
• Phone us on 13 28 61

Telstra Corporation Limited (share buy-back)

What happened

• In November 2003 Telstra undertook an off-market share buy-back of about 200 million shares
• The buy-back price of $4.20 was made up of
• a fully franked dividend of $2.70 per share, and
• a capital component (capital proceeds) of $1.50 per share

Tax implications

You must include the dividend in your assessable income for the year ended 30 June 2004. Also include the franking credit if you are entitled to claim it.

For capital gains tax purposes:

• You made a capital loss from each share equal to the difference between the reduced cost base of the share and the capital component of the buy-back price ($1.50).

Note: You cannot make a capital gain because the cost base of all shares will exceed $1.50.

Where to find more information

Phone us on 13 28 61.

United Energy (takeover)

What happened

• On 23 July 2003, Alinta and United Energy entered a scheme of arrangement under which Alinta acquired all the United Energy shares it did not already hold
• You received $3.15 for each United Energy share you held

Tax implications

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your United Energy shares was less than $3.15.
• You made a capital loss if the reduced cost base for each of your United Energy shares was greater than $3.15.
• The disposal date of your shares is 23 July 2003.

Where to find more information

Phone us on 13 28 61.

Wesfarmers Limited (return of capital)

What happened

• On 18 December 2003, Wesfarmers Limited made a return of capital (capital return) to shareholders of $2.50 per share

Tax implications

For capital gains tax purposes:

• You must reduce the cost base and reduced cost base of each share.

Adjusting the cost base of your shares

• For each share that had a cost base equal to or more than $2.50, you must reduce the cost base and reduced cost base by $2.50
• For each share that had a cost base of less than $2.50
• you made a capital gain equal to the difference between the cost base and $2.50 ($2.50 minus the cost base)
• you must reduce the cost base and reduced cost base of each share to nil

Where to find more information

• Read Wesfarmers Ltd 2003 return of capital
• See Class Ruling CR 2003/105 (Withdrawn): Income tax: Return of capital - Wesfarmers Limited
• Phone us on 13 28 61

Westpac Banking Corporation (share buy-back)

What happened

• In June 2004, Westpac conducted an off-market share buy-back
• You received $14.50 for each share Westpac bought back from you, made up of
• a fully franked dividend of $10.50, and
• a payment from share capital (capital proceeds) of $4.00*

* The ATO has determined that for capital gains tax purposes you are deemed to have received capital proceeds of $7.21 per share.

Tax implications

You must include the dividend in your assessable income for the year ended 30 June 2004. Also include the franking credit if you are entitled to claim it.

For capital gains tax purposes:

• You made a capital gain if the cost base for each of your Westpac shares was less than $7.21.
• You made a capital loss if the reduced cost base for each of your Westpac shares was greater than $7.21.
• The disposal date of your shares is 21 June 2004.

Where to find more information

• Read Westpac Banking Corporation: 2004 off-market buyback
• See Class ruling CR 2004/82 (Withdrawn): Income tax: share buy-back: Westpac Banking Corporation.
• Phone us on 13 28 61