ato class ruling wesfarmers return of capitalato class ruling wesfarmers return of capital

ITAA 1997 855-30 To be eligible to receive the return of capital, you needed to be a registered shareholder on the record date for determining entitlements, which was 4.00pm (Perth time) on Friday, 19 November 2021. All Wesfarmers shareholders on 15 December 2003 (the record date) received the capital return. 71. The right to receive the return of capital, being an intangible asset, ended by the right being discharged or satisfied when the return of capital was made (section 104-25). You will make a capital gain under CGT event C2 if the capital proceeds from the ending of the right are more than the cost base of the right. The capital return payment received in relation toshares held within theemployee share plans was based on the number of shares held on the record date4:00 pm (Perth time) Friday, 19 November 2021. As Wesfarmers has a high dividend payout ratio and distributes, where possible, available franking credits, a return of capital was seen as the most efficient distribution of capital to shareholders. 82. ITAA 1997 Div 197 The following description of the scheme is based on information provided by the applicant. Wesfarmers has paid franked dividends to its shareholders to the maximum extent available based on its franking account balance. This Ruling applies from 1 July 2021 to 30 June 2022. The cost base of the right does not include the cost base or reduced cost base of the 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 the share; for example, when you disposed of the share after the Record Date and before the Payment Date. No adverse tax consequences resulted for Wesfarmers as a consequence of return of capital. Maria must reduce the cost base of her shares by $2,500 to $1,055.80. 45. The term 'taxable Australian property' is defined in the table in section 855-15 of the ITAA 1997. 13. 6. 58. Having regard to Wesfarmers strong balance sheet and cash flow generation, together with its wellestablished funding sources and robust credit metrics, the Board was of the opinion that, consistent with Wesfarmers growth strategy, Wesfarmers was able to undertake the return of capital without materially prejudicing its ability to fund new investments, or to take advantage of value accretive opportunities, if they arise. . Return of Capital = $750 Fully Franked Dividend = $250 Units on hand after consolidation: 983 (1000 x 0.9827 - rounded to the next whole number of shares - See Point 25 in the ATO Class Ruling 2014/76 ). Corporate Archer Materials Limited (ACN: 123 993 233) ATO Class Ruling Lot Fourteen, Frome Road, Adelaide SA 5000 ASX Announcement (ASX: AXE) 16 December 2021 Capital Return - ATO Class Ruling Published Archer Materials Limited ("Archer", the "Company", "ASX:AXE") advises that the Australian Taxation Office has published a Class Ruling (CR 2021/98) (the "Ruling") relating to the . The return of capital was funded by a combination of Wesfarmers' available cash balances and existing debt facilities. CGT event G1 in section 104-135 of the ITAA 1997 will happen when Wesfarmers pays the return of capital to a Wesfarmers shareholder in respect of a Wesfarmers share that they own at the Record Date and continue to own at the Payment Date. Class Ruling CR 2014/76 Page status: legally binding Page 1 of 29 Class Ruling . 73. 79. 19. The payment of the return of capital to Wesfarmers shareholders will not be a dividend, as defined in subsection 6(1). 61. 10. 64. A scheme for the purpose of section 45B is defined under subsection 995-1(1) of the ITAA 1997 to include: 50. the return of share capital (return of capital) from Suncorp Group Limited (SGL) on 24 October 2019 (Payment Date). The capital gain is equal to the amount of the excess. Recording the capital gain on the tax return. The share consolidation will be undertaken in accordance with section 254H of the Corporations Act such that: 27. ITAA 1997 Div 110 The payment was entirely capital in nature with no dividend component. 4. The high dividend payout policy is intended to be maintained following the return of capital to shareholders. Paragraph 45A(3)(b) of the ITAA 1936 provides that capital benefits include the distribution of share capital. ITAA 1997 855-10(1) On 27 August 2021, Wesfarmers announced that it will return share capital to Wesfarmers shareholders of $2.00 per Wesfarmers share totalling $2.3 billion (return of capital). TAA 1953 If so, the capital gain is equal to the amount of the excess and the Cost base / reduced cost base of the Wesfarmers share is reduced to nil (subsection 104-135(3)). The return of capital was an equal reduction of capital under section 256B of the Corporations Act 2001 and required shareholder approval by ordinary resolution under section 256C of the Corporations Act 2001. The term 'share capital account' is defined in section 975-300 as an account which the company keeps of its share capital, or any other account created on or after 1 July 1998 where the first amount credited to the account was an amount of share capital. 29. Create your myGov account and link it to the ATO, Help and support to lodge your tax return, Occupation and industry specific income and work-related expenses, Residential rental properties and holiday homes, Instalment notices for GST and PAYG instalments, Your obligations to workers and independent contractors, Encouraging NFP participation in the tax system, Australian Charities and Not-for-profits Commission, Departing Australia Superannuation Payment, Small Business Superannuation Clearing House, Annual report and other reporting to Parliament, Complying with procurement policy and legislation, Wesfarmers Group Limited (Wesfarmers) return of capital. The ATO Class Ruling confirms that there will be no immediate tax liability relating to the return of capital for most Wesfarmers . The capital return on your shares is a capital gain tax event that may have resulted in a capital gain for you. Commissioner of Taxation a capital payment (it was not classed as a dividend for any purpose and had no dividend component). ITAA 1997 104-135 TD 2000/10, Subject References: ITAA 1936 45B(8) Specifically, the provision applies where: 48. The market value of Wesfarmers' assets that are taxable Australian real property within the meaning of section 855-20 is less than the market value of Wesfarmers' other assets for the purposes of section 855-30. The capital gain will be a discounted capital gain for shares allocated at least 12 months before the payment date of Thursday, 2 December 2021. The Australian Taxation Office has given Wesfarmers the all-clear to hand over $1.1 billion to shareholders. 24. 52. 59. 10. Section 45A - streaming of dividends and capital benefits. Wesfarmers website ATO Class Ruling 2014/76 Capital Management Initiative Key Dates Scenario: The fund held 1000 shares as at the record date. if the cost base (after any adjustment, as may be relevant, for any indexation, any previous return of capital or as a result of the Coles demerger) of a share acquired after 19 September 1985 is less than the return of capital amount (on a cents per share basis), then an immediate capital gain will arise for the difference. 49. ITAA 1936 45B(9) CGT events G1-G3 - shares If, after the Record Date but before the Payment Date, a Wesfarmers shareholder ceases to own some, or all, of their shares in Wesfarmers, the right to receive the payment of the return of capital in respect of each of the shares disposed of will be retained by the shareholder and is considered to be a separate CGT asset. 8. ITAA 1997 977-50 5. 23. The capital return was completed on 18December 2003. Some of the information on this website applies to a specific financial year. However, the list of relevant circumstances in subsection 45B(8) is not exhaustive and regard may be had to other circumstances on the basis of their relevance. Subsection 44(1) includes in a shareholder's assessable income any dividends, as defined in subsection 6(1), paid to the shareholder out of profits derived by the company from any source (if the shareholder is a resident of Australia) and from an Australian source (if the shareholder is a non-resident of Australia). TR 2006/10 ITAA 1997 109-5 The Australian Taxation Office (ATO) has published a Class Ruling in relation to the taxation treatment of the $2.00 per share return of capital to Wesfarmers shareholders, which was paid on 2 December 2021. 68. The record date for the capital return payment was 4:00pm(Perth time) on Friday, 19 November 2021. For more information about this return of capital, see Class Ruling CR 2003/105W: Return of capital: Wesfarmers Limited. The ATO Class Ruling confirms that there will be no immediate tax liability relating to the return of capital for most Wesfarmers . There was no share consolidation as part of this capital management initiative and the number of Wesfarmers shares held by shareholders was not affected by the return of capital. A copy of the Class Ruling is available from the Wesfarmers website (www.wesfarmers.com.au). The ATO has issued 10 class rulings, which are as follows: Class Ruling CR 2021/87 Wesfarmers Ltd return of capital. As such, paragraph (d) of the definition of 'dividend' in subsection 6(1) of the ITAA 1936 applies and the return of capital is not a dividend. How do I adjust the cost base and reduced cost base of my Wesfarmers shares? The application of sections 45A, 45B and 45C to the return of capital. ITAA 1936 45B(5) 69. 36. For shares that had reached a taxing point (i.e. All Wesfarmers shareholders on 15 December 2003 (the record date) received the capital return. 29. Wesfarmers is committed to efficient capital management and its focus on providing a satisfactory return to all shareholders. ITAA 1997 Div 112 It applied to each shareholder equally in proportion to the number of shares they held and the terms of the return were the same for each shareholder. ITAA 1997 104-25 For participants in the Australian tax exempt share plans or the loan plans the cost base for each share held on behalf of employees should be reduced by the return of capital amount. If the scheme is not carried out as described, this Ruling cannot be relied upon. At Wesfarmers we believe sustainability is about understanding and managing the ways we impact the communities and environments in which we operate, to ensure that we continue to create value in the future. 3. The Commissioner will not make a determination under either subsection 45A(2) of the ITAA 1936 or paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies to any part of the return of capital of $2.00 per Wesfarmers share you received on the Payment Date. 57. On 3November 2003 Wesfarmers Limited announced a return of capital ('capital return'). ITAA 1936 45A Australian Taxation Office for the Commonwealth of Australia, Aboriginal and Torres Strait Islander people. Under subsection 855-10(1) of the ITAA 1997, an entity disregards a capital gain or capital loss from a CGT event if they are a foreign resident, or the trustee of a foreign trust for CGT purposes, just before the CGT event happens, and the CGT event happens in relation to a CGT asset that is not 'taxable Australian property'. The return of capital will be paid equally to each holder of a Wesfarmers share (being ordinary shares and partially protected ordinary shares) who is registered on the Wesfarmers share register on the Record Date. Make sure you have the information for the right year before making decisions based on that information. ITAA 1997 104-135(3) Some of the information on this website applies to a specific financial year. ITAA 1997 Div 197 Accordingly, the Commissioner will not make a determination under subsection 45B(3) of the ITAA 1936 that section 45C of the ITAA 1936 applies in relation to the whole, or a part, of the return of capital. Shareholders voted in favour of the return of capital at the Annual General Meeting ( AGM) on Thursday, 21 October 2021. 3.7 Cash return of capital amount per +security AUD 2.00000000 Part 4 - Changes to option pricing as a result of the cash return of capital 4.1 Will the cash return of capital affect the exercise price of any +entity-issued options? Payments should have appeared in your bank account between Thursday, 2 December and Thursday, 9 December 2021, depending on the transfer time between banks. 58. 19. Foreign-resident shareholders able to disregard capital gains tax. The new cost base for his share parcel is $2,550 ($3,050 - $500), or $12.75 per share. A Wesfarmers shareholder cannot make a capital loss from CGT event G1 happening (subsection 104-135(3) of the ITAA 1997). ATO references: A Wesfarmers share is not an 'indirect Australian real property interest' as defined in section 855-25 of the ITAA 1997. Division 230 does not apply to individuals unless they have made an election for it to apply. The ruling has determined that the funds will be distributed via a return of capital of 75c per share and a fully franked dividend of 25c. a CGT asset that is covered by subsection 104-165(3) of the ITAA 1997 (choosing to disregard a capital gain or capital loss on ceasing to be an Australian resident). 31. Wesfarmers Limited was founded in 1914 and is headquartered in Perth, Australia. according to an ATO ruling. By . 44. You will make a capital loss if the capital proceeds from the ending of the right are less than the reduced cost base of the right. work out whether you have made a capital gain (you cannot make a capital loss on a return of capital). If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice. Part 5 - Further information 5.1 Has the +entity applied for an ATO class ruling relating to this cash return of . On 3 November 2021, Wesfarmers Limited (ASX Code: WES) announced the details of the $2.00 capital return. Bunnings Limited shareholders offered $11.20 for each Bunnings share or $25.80 plus 2 Wesfarmers shares plus 1 Wesfarmers option ($12.50) for every 4 Bunnings shares 6 Nov 1989 Renounceable rights offer - 1 for 7 at a price of $4.25 per share 13 Jan 1989 Share split - each $1.00 share split into 2 x 50 cent shares 22 Apr 1987 ITAA 1997 Div 112 The capital return was undertaken to return a portion of surplus capital equitably to shareholders and to ensure that Wesfarmers has a more efficient capital structure. Return of Capital Wesfarmers proposes to make a cash payment to shareholders of A$0.50 per ordinary share and partially protected share as a return of capital. A Wesfarmers shareholder will make a capital gain if the capital proceeds from the ending of the right are more than its cost base. As the share capital account of Wesfarmers is not tainted within the meaning of Division 197 of the ITAA 1997, paragraph (d) of the definition of 'dividend' in subsection 6(1) will apply and the return of capital will not constitute a dividend under subsection 6(1). Class Ruling CR 2003/105W: Return of capital: Wesfarmers Limited, Personal investors guide to capital gains tax, Aboriginal and Torres Strait Islander people, you are an Australian resident for tax purposes, you held shares in Wesfarmers and received the return of capital in December2003, you did not acquire your shares under an employee share scheme, and. The capital gain will be a discount capital gain for shareholders that are an individual, trust or complying superannuation fund and acquired their shares at least 12 months before the payment date. The return of capital was announ The proportion of funding from each source was determined having regard to the most cost-effective source of funding available as at the date of payment. The Wesfarmers Dividend Investment Plandid not apply to the return of capital payment. The purpose which causes section 45B to apply may be the purpose of any party to the scheme. 10. Wesfarmers has confirmed that its share capital account (as defined in section 975-300 of the ITAA 1997) is not tainted (within the meaning of Division 197 of the ITAA 1997). A CGT asset that is covered by subsection 104-165(3) (choosing to disregard a gain or loss on ceasing to be an Australian resident). 9. 14 December 2018 Demerger of Coles Group Limited - ATO Class Ruling The Australian Commissioner of Taxation has today issued Class Ruling CR 2018/59 (Class Ruling) covering the Australian income tax implications of the demerger of Coles Group Limited (Coles) for shareholders of Wesfarmers Limited (Wesfarmers).The Class Ruling confirms the availability of demerger tax relief for certain . Property interest ' as defined in the table in section 855-15 of the year. Apply may be the purpose of any party to the scheme specific financial.! Ruling CR 2014/76 Page status: legally binding Page 1 of 29 Class Ruling confirms that there will undertaken. Reduced cost base for his share parcel is $ 2,550 ( $ 3,050 - 500. 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