Show download pdf controls
  • AMP Limited (return of capital)

    What happened

    • AMP Limited (AMP) made a capital return of 40 cents per share in June 2006
    • The record date for entitlement to the capital return was 25 May 2006
    • The payment date for the capital return was 19 June 2006

    Capital gains tax (CGT) implications

    For shares that you owned at record date and still owned at payment date:

    • For each share that had a cost base equal to or more than $0.40, you must reduce the cost base and reduced cost base by $0.40.
    • For each share that had a cost base of less than $0.40
      • you made a capital gain equal to the difference between the cost base and $0.40 ($0.40 minus the cost base)
      • you must reduce the cost base and reduced cost base of each share to nil.
       

    For shares that you owned at record date but no longer owned at payment date:

    • The return of capital is a CGT event that is separate from the disposal of your shares.
    • You made a capital gain of $0.40 per share on the return of capital.
    • If you acquired the shares on or before 18 June 2005, you may qualify for a discount capital gain on the return of capital.

    Where to find more information

    Read AMP Limited (AMP): 2006 return of capital.

    See Class Ruling CR 2006/25 (Withdrawn). Income tax: AMP Limited - proposed return of capital to shareholders.

    Note that class rulings on events are automatically withdrawn at the end of the income year the event took place in. However, these rulings continue to apply to participants in these events after they are officially withdrawn.

    Aristocrat Leisure Limited (return of capital)

    What happened

    • Aristocrat Leisure Limited (Aristocrat) made a capital return of 21 cents per share in July 2005
    • The record date for entitlement to the capital return was 1 July 2005
    • The payment date for the capital return was 15 July 2005

    Capital gains tax (CGT) implications

    For shares that you owned at record date and still owned at payment date:

    • For each share that had a cost base equal to or more than $0.21, you must reduce the cost base and reduced cost base by $0.21, but not below nil.
    • For each share that had a cost base of less than $0.21
      • you made a capital gain equal to the difference between the cost base and $0.21 ($0.21 minus the cost base), and
      • you must reduce the cost base and reduced cost base of each share to nil.
       

    For shares that you owned at record date but no longer owned at payment date:

    • The return of capital is a capital gains tax (CGT) event that is separate from the disposal of your shares.
    • You made a capital gain of $0.21 per share on the return of capital.
    • If you acquired the shares before 15 July 2004, you may qualify for a discount capital gain on the return of capital.

    Where to find more information

    Avatar Industries Limited (return of capital)

    What happened

    • Avatar Industries Limited (Avatar) made a capital return of 5 cents per share in May 2006
    • The record date for entitlement to the capital return was 10 May 2006
    • The payment date for the capital return was 17 May 2006

    Capital gains tax (CGT) implications

    For shares that you owned at record date and still owned at payment date:

    • For each share that had a cost base equal to or more than $0.05, you must reduce the cost base and reduced cost base by $0.05, but not below nil.
    • For each share that had a cost base of less than $0.05:
      • you made a capital gain equal to the difference between the cost base and $0.05 ($0.05 minus the cost base), and
      • you must reduce the cost base and reduced cost base of each share to nil.
       

    For shares that you owned at record date but no longer owned at payment date:

    • The return of capital is a CGT event that is separate from the disposal of your shares.
    • You made a capital gain of $0.05 per share on the return of capital.
    • If you acquired the shares before 17 May 2005, you may qualify for a discount capital gain on the return of capital.

    Where to find more information

    See Class Ruling CR 2006/39 (Withdrawn) - Income tax: Avatar Industries Limited: proposed return of capital.

    Baycorp Advantage Limited (return of capital)

    What happened

    • Baycorp Advantage Limited (Baycorp) made a capital return of 50 cents per share in November 2005
    • The record date for entitlement to the capital return was 3 November 2005
    • The payment date for the capital return was 17 November 2005

    Capital gains tax (CGT) implications

    For shares that you owned at record date and still owned at payment date:

    • For each share that had a cost base equal to or more than $0.50, you must reduce the cost base and reduced cost base by $0.50, but not below nil.
    • For each share that had a cost base of less than $0.50
      • you made a capital gain equal to the difference between the cost base and $0.50 ($0.50 minus the cost base), and
      • you must reduce the cost base and reduced cost base of each share to nil.
       

    For shares that you owned at record date but no longer owned at payment date:

    • The return of capital is a CGT event that is separate from the disposal of your shares.
    • You made a capital gain of $0.50 per share on the return of capital.
    • If you acquired the shares before 17 November 2004, you may qualify for a discount capital gain on the return of capital.

    Where to find more information

    See Class Ruling CR 2005/86 (Withdrawn), Income tax: Baycorp Advantage: return of capital and on-market share buy-back.

    CSR Limited (return of capital)

    What happened

    • CSR Limited (CSR) made a capital return of 20 cents per share in August 2005
    • The record date for entitlement to the capital return was 21 July 2005
    • The payment date for the capital return was 4 August 2005

    Capital gains tax (CGT) implications

    For shares that you owned at record date and still owned at payment date:

    • For each share that had a cost base equal to or more than $0.20, you must reduce the cost base and reduced cost base by $0.20, but not below nil.
    • For each share that had a cost base of less than $0.20
      • you made a capital gain equal to the difference between the cost base and $0.20 ($0.20 minus the cost base), and
      • you must reduce the cost base and reduced cost base of each share to nil.
       

    For shares that you owned at record date but no longer owned at payment date:

    • The return of capital is a CGT event that is separate from the disposal of your shares.
    • You made a capital gain of $0.20 per share on the return of capital.
    • If you acquired the shares before 4 August 2004, you may qualify for a discount capital gain on the return of capital.

    Where to find more information

    Read CSR Limited (CSR): 2005 return of capital

    See Class Ruling CR 2005/45 (Withdrawn): Income tax: capital reduction: CSR

    Keycorp Limited (return of capital)

    What happened

    • Keycorp Limited (Keycorp) made a capital return of 41 cents per share in September 2005
    • The record date for entitlement to the capital return was 5 September 2005 
    • The payment date for the capital return was 12 September 2005

    Capital gains tax (CGT) implications

    For shares that you owned at record date and still owned at payment date:

    • For each share that had a cost base equal to or more than $0.41, you must reduce the cost base and reduced cost base by $0.41, but not below nil.
    • For each share that had a cost base of less than $0.41
      • you made a capital gain equal to the difference between the cost base and $0.41 ($0.41 minus the cost base), and
      • you must reduce the cost base and reduced cost base of each share to nil.
       

    For shares that you owned at record date but no longer owned at payment date:

    • The return of capital is a CGT event that is separate from the disposal of your shares.
    • You made a capital gain of $0.41 per share on the return of capital.
    • If you acquired the shares before 12 September 2004, you may qualify for a discount capital gain on the return of capital.

    Where to find more information

    See Class Ruling CR 2005/71 (Withdrawn), Income tax: Keycorp Limited - proposed return of capital.

    Mayne Group Limited (demerger)

    What happened

    • On 30 November 2005, Mayne Group Limited de-merged its interest in Mayne Pharma Limited. Following the demerger, Mayne Group Limited was renamed Symbion Health Limited
    • Under the demerger, you received a return of capital of $2.49 for each Mayne Group share you held
    • The capital return was compulsorily used to purchase the Mayne Pharma shares
    • You received one Mayne Pharma Limited share for every Mayne Group share you held

    Tax implications

    For income tax purposes:

    • You do not include the return of capital in your assessable income.
    • Demerger rollover relief is available.

    For capital gains tax (CGT) purposes:

    • The CGT status of your new Mayne Pharma shares will depend on when you acquired the original Mayne Group shares and on whether you choose rollover relief.
    • You may be required to include a capital gain or loss from this demerger in your tax return for 2005-06 if you do not choose rollover relief.
    • You must adjust the cost base and reduced cost base of your shares whether or not you chose rollover relief.

    Adjusting your cost base

    Take the cost base of your post-CGT Mayne Group shares just before the demerger (not including indexation) and spread the amount across both your Mayne Group (Symbion Health) and Mayne Pharma shares. Do this in the following proportions:

    • Mayne Group (Symbion Health) Limited = 55.783% of total.
    • Mayne Pharma Limited = 44.217% of total.

    If you do not choose rollover, the cost base of the Mayne Pharma shares received that relate to pre-CGT Mayne Group shares is $2.49 per share.

    Where to find more information

    Read: Demergers: 2005 Mayne Group Ltd (renamed Symbion Health Ltd) demerger

    See: Class Ruling CR 2005/83 (Withdrawn) Income tax: demerger of Mayne Pharma Limited by Mayne Group Limited.

    Visit the Symbion Health websiteExternal Link.

    New Hope Limited (return of capital)

    What happened

    • New Hope Limited (New Hope) made a capital return of 10 cents per share in December 2005
    • The record date for entitlement to the capital return was 2 December 2005
    • The payment date for the capital return was 16 December 2005

    Capital gains tax (CGT) implications

    For shares that you owned at record date and still owned at payment date:

    • For each share that had a cost base equal to or more than $0.10, you must reduce the cost base and reduced cost base by $0.10, but not below nil.
    • For each share that had a cost base of less than $0.10
      • you made a capital gain equal to the difference between the cost base and $0.10 ($0.10 minus the cost base), and
      • you must reduce the cost base and reduced cost base of each share to nil.
       

    For shares that you owned at record date but no longer owned at payment date:

    • The return of capital is a CGT event that is separate from the disposal of your shares.
    • You made a capital gain of $0.10 per share on the return of capital.
    • If you acquired the shares before 16 December 2004, you may qualify for a discount capital gain on the return of capital.

    Where to find more information

    See Class Ruling CR 2005/96 (Withdrawn) Income tax: return of capital: New Hope Corporation Limited.

    Patrick Corporation (takeover by Toll)

    What happened

    • Between 29 September 2005 and 25 May 2006, Toll Limited (Toll) made a takeover offer for Patrick Corporation (Patrick)
    • Patrick shareholders who accepted the offer received $3.00 cash plus 0.4 Toll shares for each Patrick share
    • Patrick shareholders who did not accept the offer before 7.00 pm (Melbourne time) on 25 May 2006 had their shares compulsorily acquired on 1 July 2006. They received the same consideration as accepting shareholders

    Tax implications

    For capital gains tax (CGT) purposes:

    Rollover relief

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

    Capital gain/loss calculation

    • If you choose rollover, you work out your capital gain (no loss allowed) by subtracting a pro-rata portion of the cost base of your Patrick shares from the value of cash that you received
    • If rollover does not apply, you work out your capital gain or loss by comparing the total cost base of your Patrick shares with the total value (as at the disposal date) of the cash and shares that you received

    Acquisition cost of new Toll shares calculation

    • If you choose rollover, you work out the acquisition cost of your new Toll shares by allocating the remaining portion (not used to work out the capital gain) of the cost base of your Patrick shares to it
    • If rollover does not apply, you work out the acquisition cost of your new Toll shares by subtracting the amount of the cash that you received from the total value of your Patrick shares on the disposal date

    Disposal date

    The disposal date of the shares was:

    • if you accepted the offer between 29 September 2005 and 7.00pm Melbourne time 25 May 2006 - the date you accepted the offer
    • if you did not accept the offer by 7.00pm Melbourne time 25 May 2006 - the date that your shares were compulsorily acquired.

    Where to find more information

    See Class Ruling 2006/60 (Withdrawn): Income tax: scrip for scrip rollover: acquisition of Patrick Corporation Limited shares by Toll Holdings Limited.

    Phone us on 13 28 61.

    Promina Group Limited (return of capital)

    What happened

    • Promina Group Limited (Promina) made a capital return of 15 cents per share in June 2006
    • The record date for entitlement to the capital return was 1 June 2006
    • The payment date for the capital return was 16 June 2006

    Capital gains tax (CGT) implications

    For shares that you owned at record date and still owned at payment date:

    • For each share that had a cost base equal to or more than $0.15, you must reduce the cost base and reduced cost base by $0.15.
    • For each share that had a cost base of less than $0.15
      • you made a capital gain equal to the difference between the cost base and $0.15 ($0.15 minus the cost base)
      • you must reduce the cost base and reduced cost base of each share to nil.
       

    For shares that you owned at record date but no longer owned at payment date:

    • the return of capital is a CGT event that is separate from the disposal of your shares
    • you made a capital gain of $0.15 per share on the return of capital
    • if you acquired the shares on or before 15 June 2005, you may qualify for a discount capital gain on the return of capital.

    Where to find more information

    See Class Ruling CR 2006/45 (Withdrawn): Promina Limited - proposed 2006 return of capital.

    Note
    Class rulings on events are automatically withdrawn at the end of the income year that the event took place in. However, these rulings continue to apply to participants in these events after they are officially withdrawn.

    Phone us on 13 28 61.

      Last modified: 20 Jul 2017QC 18793