• Key events for Australian shareholders 2001-02

    Introduction

    This document contains links to information about events affecting listed investments (shares and units) where a significant number of investors are involved.

    Key events 2001-02

    Companies in liquidation or administration

    In the course of winding up a company, the liquidator may declare in writing that he or she has reasonable grounds to believe there is no likelihood that shareholders in the company, or shareholders of a relevant class of shares, will receive any further distribution (CGT event G3 declaration).

    If this happens, shareholders can choose to make a capital loss equal to the reduced cost base of a share acquired on or after 20 September 1985. The capital loss arises in the income year in which the liquidator made the declaration.

    The cost base and reduced cost base of the shares are reduced to nil just after the liquidator makes the declaration. These reductions are relevant in working out if the shareholder makes a capital gain or capital loss from any later capital gains tax (CGT) event in relation to each share.

    Harris Scarfe Holdings Ltd

    On 6 April 2001, receivers and managers were appointed to Harris Scarfe Holdings Ltd. On 3 January 2002, the creditors of the company passed a resolution to wind up each company in the group.

    In a letter to shareholders dated 26 June 2002, the liquidators of Harris Scarfe Holdings Ltd advised that they are unable to determine, at this point in time, the amount of any return to creditors and shareholders in the winding up of Harris Scarfe Holdings Ltd. The liquidators have also advised that it may be some considerable time before all issues are resolved in the courts.

    As a result, the liquidators are unable to make a CGT event G3 declaration. This means that shareholders cannot choose to make a capital loss in respect of their Harris Scarfe Holdings Ltd shares under CGT event G3 (about worthless shares) in the 2001-02 income year.

    HIH Insurance Ltd

    The liquidator of HIH made a CGT event G3 declaration on 10 October 2001. Therefore, HIH shareholders who acquired their shares on or after 20 September 1985, and make the choice, will make a capital loss equal to the reduced cost base of their shares at the time of the liquidator's declaration. The capital loss is made in the 2001-02 income year.

    For further information, refer to Taxation Determination TD 2002/3 Income tax: capital gains: can a shareholder in HIH Insurance Limited choose to make a capital loss on a share in that company under CGT event G3 (about a liquidator declaring shares worthless) in section 104-145 of the Income Tax Assessment Act 1997? and addendum.

    Example

    Hillary purchased shares in HIH Insurance Ltd on or after 20 September 1985. CGT event G3 occurred on 10 October 2001 when the liquidator made the declaration. Hillary chooses to make capital losses equal to the reduced cost bases of her shares as at 10 October 2001. The cost bases and reduced cost bases of her HIH Insurance Ltd shares are reduced to nil just after the liquidator made the declaration. Her capital loss is included in her 2001-02 tax return.

    One.Tel Ltd

    The liquidator of One.Tel made a CGT event G3 declaration on 30 May 2002. Therefore, One.Tel shareholders who make the choice will make a capital loss equal to the reduced cost base of their shares at the time of the liquidator's declaration. The capital loss is made in the 2001-02 income year.

    For further information, refer to Taxation Determination TD 2002/17 Income tax: capital gains: can a shareholder in One.Tel Limited choose to make a capital loss on a share in that company under CGT event G3 (about a liquidator declaring shares worthless) in section 104-145 of the Income Tax Assessment Act 1997?

    Pasminco Ltd

    On 19 September 2001, the board of Pasminco Ltd placed the company into voluntary administration. Pasminco Ltd shares ceased trading on the stock exchange on 20 September 2001.

    On 30 August 2002, Pasminco's creditors voted to accept a proposal to restructure the group through a Deed of Company Arrangement. While the Deed is in operation, the company continues to be in administration.

    As Pasminco Ltd is in administration and not liquidation, CGT event G3 cannot have happened. Shareholders are unable to claim a capital loss on their shares until such time as they can effectively dispose of their shares.

    Capital losses on Pasminco Ltd shares addresses commonly asked questions about Pasminco Ltd.

    Demutualisations

    IOOF demutualisation

    IOOF Ltd was a Friendly Society that was a mutual company.

    On 14 June 2002, the members of IOOF Ltd resolved to demutualise.

    On 30 June 2002, IOOF Ltd demutualised and shares in IOOF Holdings Ltd (IOOF) were issued to approximately 70,000 members.

    IOOF was listed on the Australian Stock Exchange (ASX) on 4 December 2003.

    IOOF demutualisation: impact on individual shareholders outlines the capital gains tax implications of the demutualisation for people who received shares in IOOF Holdings Ltd (IOOF) as a result of the demutualisation of IOOF Ltd.

    OFM Investment Group Limited (OFM) demutualisation

    Over 50s Mutual Friendly Society Limited (OFM Ltd) was a Friendly Society that was a mutual company.

    On 12 June 2001, the members of OFM Ltd resolved to demutualise.

    On 1 July 2001, OFM Ltd demutualised and shares in OFM Investment Group Limited (OFM) were issued to about 44,500 members.

    OFM was listed on the ASX on 26 March 2002.

    OFM Investment Group Limited (OFM) demutualisation: impact on individual shareholders outlines the capital gains tax implications of the demutualisation for people who received shares in OFM Investment Group Limited (OFM) as a result of the demutualisation.

    Instalment note exchange

    Suncorp-Metway Limited shares: Exchanging Instalment Notes (EINs) - series 2

    Suncorp-Metway Ltd shares received in exchange for Series 2 EINs were acquired on 31 October 2001. Their acquisition cost was $13.34 per share.

    Suncorp-Metway Limited shares: exchanging instalment note - series 2 contains information for people holding EIN Series 2 for Suncorp-Metway Ltd shares.

    More information

    For more information about capital gains tax on shares, read the Personal investors guide to capital gains tax.

    If you need help in applying this information to your own situation, phone us on 13 28 61.

      Last modified: 23 Nov 2011QC 23694