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Class Ruling

CR 2026/81

Mantle Minerals Limited - return of capital

  • Please note that the PDF version is the authorised version of this ruling.

Table of Contents Paragraph
What this Ruling is about
Who this Ruling applies to
When this Ruling applies
Ruling
7
Scheme
19

  Relying on this Ruling

This publication is a public ruling for the purposes of the Taxation Administration Act 1953.

If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.

What this Ruling is about

1. This Ruling sets out the income tax consequences for shareholders of Mantle Minerals Limited (Mantle) who received a return of capital payment of $0.001 per Mantle ordinary share (Capital Return) on 3 November 2025 (Payment Date).

2. Details of this scheme are set out in paragraphs 19 to 37 of this Ruling.

3. All legislative references in this Ruling are to the Income Tax Assessment Act 1997, unless otherwise indicated.

Who this Ruling applies to

4. This Ruling applies to you if you:

•
were registered on the Mantle share register on 27 October 2025 (Record Date)
•
held your Mantle shares on capital account – that is, you did not hold your Mantle shares as 'revenue assets' (as defined in section 977-50) or as 'trading stock' (as defined in subsection 995-1(1))
•
were not a 'temporary resident' as defined in subsection 995-1(1)
•
were not exempt from Australian income tax, and
•
received the Capital Return on the Payment Date.

5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 in relation to the scheme outlined in paragraphs 19 to 37 of this Ruling.

Note: Division 230 will not apply to individuals unless they have made an election for it to apply.

When this Ruling applies

6. This Ruling applies from 1 July 2025 to 30 June 2026.

Ruling

Return of capital is not a dividend

7. No part of the Capital Return paid to you by Mantle on the Payment Date is a dividend as defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). Therefore, no part of the Capital Return is included in your assessable income as a dividend under subsection 44(1) of the ITAA 1936.

Return of capital is not ordinary income

8. No part of the Capital Return paid to you by Mantle on the Payment Date is included in your assessable income as ordinary income under section 6-5.

Sections 45A, 45B and 45C of the ITAA 1936 do not apply

9. The Commissioner will not make a determination under either subsection 45A(2) or paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies to any part of the Capital Return you received on the Payment Date.

Capital gains tax consequences

CGT event G1

10. CGT event G1 happened on the Payment Date when Mantle paid you the Capital Return in respect of each Mantle share you owned on the Record Date and continued to own on the Payment Date (section 104-135).

11. You made a capital gain when CGT event G1 happened if the amount of the Capital Return you received was more than the cost base of your Mantle share (subsection 104-135(3)). The amount of the gain is equal to the excess. If you made a capital gain, the cost base and reduced cost base of your Mantle share is reduced to nil (subsection 104-135(3)).

12. If the Capital Return was not more than the cost base of your Mantle share, the cost base or reduced cost base of your Mantle share is reduced by the amount of the Capital Return (subsection 104-135(4)).

13. You cannot make a capital loss when CGT event G1 happens (Note 1 to subsection 104-135(3)).

CGT event C2

14. CGT event C2 happened to your right to receive the Capital Return on the Payment Date in respect of each Mantle share you owned on the Record Date but ceased to own before the Payment Date (section 104-25).

15. You made a capital gain under CGT event C2 if the capital proceeds from the ending of the right (being the Capital Return amount) were more than the cost base of the right. You made a capital loss if the capital proceeds from the ending of the right were less than the reduced cost base of the right (subsection 104-25(3)).

16. In working out the capital gain or capital loss when CGT event C2 happened:

•
The capital proceeds are equal to the amount of the Capital Return for each share you owned on the Record Date but ceased to own before the Payment Date ($0.001 per Mantle share) (subsection 116-20(1)).
•
The cost base of your right to receive the Capital Return is worked out under Division 110 (modified by Division 112). The cost base of the right does not include the cost base or reduced cost base of the Mantle share previously owned by you to the extent that it was applied in working out a capital gain or capital loss made when a CGT event happened to that share – for example, when you disposed of the share after the Record Date but before the Payment Date. Therefore, if the cost base or reduced cost base of the Mantle share previously owned by you has been fully applied in working out a capital gain or capital loss on the share, the right to receive the Capital Return will have a nil cost base. As a result, you will, in those circumstances, make a capital gain equal to the capital proceeds, being $0.001 per Mantle share you owned at the Record Date.

Discount capital gain

17. You can treat a capital gain made when CGT event G1 or CGT event C2 happened as a discount capital gain if you acquired your Mantle share at least 12 months before the Payment Date (subsection 115-25(1)), provided the other conditions in Subdivision 115-A are satisfied.

Foreign resident shareholders

18. If you were a 'foreign resident', or the trustee of a 'foreign trust for CGT purposes' (as defined in subsection 995-1(1)), just before the Payment Date, you disregard under subsection 855-10(1) any capital gain made from CGT event G1 or any capital gain or capital loss made from CGT event C2, provided that your Mantle share or your right to receive the Capital Return on your Mantle share:

•
has not been used at any time in carrying on a business through a permanent establishment in Australia (table item 3 of section 855-15), and
•
was not covered by subsection 104-165(3) (about individuals choosing to disregard a capital gain or capital loss on ceasing to be an Australian resident) (table item 5 of section 855-15).

Scheme

19. This description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon.

Mantle Minerals Limited

20. Mantle was formerly known as Caeneus Minerals Ltd prior to 30 November 2022.

21. Mantle was incorporated in Australia on 15 May 1998. It has been listed on the Australian Securities Exchange since 11 July 2000.

22. Mantle is an Australian-based mineral exploration and development company established for the purposes of acquiring prospective exploration or near-term development projects in Australia and the United States of America.

23. Mantle is the head company of an income tax consolidated group under Part 3-90.

24. As at 31 December 2025, Mantle had:

•
share capital of $91,376,969
•
accumulated losses of $89,513,048, and
•
reserves of $3,633,124.

Sale of Mt Roe Mining Pty Ltd

25. On 15 August 2025, Mantle completed the sale of its wholly owned subsidiary, Mt Roe Mining Pty Ltd to Northern Star Resources Ltd for cash consideration of $13.5 million.

Capital Return

26. On 2 September 2025, Mantle announced its intention to seek shareholder approval to undertake the Capital Return in accordance with sections 256B and 256C of the Corporations Act 2001.

27. The Capital Return was approved by shareholders of Mantle on 21 October 2025.

28. On the Record Date, Mantle had 7,233,114,834 ordinary shares on issue.

29. On the Payment Date, Mantle shareholders were paid the Capital Return (being $0.001 per share) in respect of each Mantle share they held on the Record Date.

30. The total Capital Return of $7,233,114 was paid from Mantle's available cash balance and debited to its share capital account.

31. The Capital Return did not result in the cancellation of any shares in Mantle.

Other matters

32. The 'share capital account' (as defined in section 975-300) of Mantle is not tainted within the meaning of Division 197.

33. On the Payment Date, approximately 98.66% and 1.33% of Mantle shares on issue were held by Australian resident and non-resident shareholders respectively.

34. On the Payment Date and throughout a 12-month period that began no earlier than 24 months before the Payment Date and ended no later than the Payment Date, the sum of the direct participation interests held by a non-resident shareholder and its associates in Mantle was not 10% or more.

35. Mantle has not previously undertaken a reduction in share capital before the Payment Date.

36. Mantle has not declared any dividends since its incorporation.

37. Mantle predominantly commingles its raised capital and uses those funds across multiple mineral exploration and development projects.

Commissioner of Taxation
21 October 2026

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).


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