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Key events for Australian shareholders 2004–05

A listing of the capital gains tax implications of certain actions by Australian companies in 2004-05.

Last updated 19 July 2017

This document contains summaries and links to documents about events affecting listed investments (shares and units) where a significant number of investors are involved. In some cases, a summary of the facts and the tax consequences for Australian resident investors is supplied. Where available, other sources of information are listed.

AMP Limited (return of capital)

What happened

  • AMP Limited (AMP) made a capital return of 40 cents per share in June 2005
     
  • The record date for entitlement to the capital return was 26 May 2005
     
  • The payment date for the capital return was 16 June 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 $0.40, 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), 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 $0.40 per share on the return of capital.
     
  • If you acquired the shares on or before 15 June 2004, you may qualify for a discount capital gain on the return of capital.

Where to find more information

Australian Gas Light Company (return of capital)

What happened

  • Australian Gas Light Company (AGL) made a capital return of 50 cents per share in April 2005
     
  • The record date for entitlement to the capital return was 13 April 2005
     
  • The payment date for the capital return was 29 April 2005

Capital gains tax 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.
     
  • 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 at least 12 months before the payment of the capital amount, you may qualify for a discount capital gain on the return of capital.
     

For more information, read paragraphs 54 to 60 of Class Ruling CR 2005/23 (Withdrawn) Income tax: return of capital: The Australian Gas Light Company.

Where to find more information

Henderson (formerly HHG) plc (capital restructure)

What happened

  • In April 2005, HHG plc restructured
     
  • Under the restructure, HHG undertook a capital reduction in two parts
    • In the first part, 52 out of every 100 CDIs that you held were cancelled; you received $1.34585 for each CDI cancelled in this part.
       
    • In the second part, shareholdings were reduced to a multiple of 500 CDIs (if you had less than 500 CDIs, all were cancelled). You received $1.56608 for each CDI cancelled in this part.
     

Tax implications

For capital gains tax purposes:

  • You made a capital gain if the cost base for your CDIs was less than the amount that you received for their cancellation.
     
  • You made a capital loss if the reduced cost base for your CDIs was greater than the amount that you received for their cancellation.
     
  • The disposal date of your CDIs is in April 2005.

Where to find more information

News Corporation (capital restructure)

What happened

  • On 12 November 2004, The News Corporation Limited (Australia) (TNCL) entered a scheme of arrangement under which their shareholders exchanged their TNCL shares for equivalent interests in News Corporation Inc (USA) (NC)
     
  • TNCL shareholders had a choice of receiving either one NC share or one NC CDI for every two TNCL shares that they owned
     
  • In either case, the value of the consideration shareholders received was equivalent to $11.64 for each TNCL ordinary share surrendered

Tax implications

For capital gains tax purposes:

Scrip-for-scrip rollover is available on the exchange of either NC shares or NC CDIs for TNCL shares.

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

  • You made a capital gain if the cost base for each of your ordinary shares was less than $11.64.
     
  • You made a capital loss if the reduced cost base for each of your ordinary shares was greater than $11.64.
     
  • The disposal date of your shares is 12 November 2004.

Where to find more information

Promina Group Limited (return of capital)

What happened

  • Promina Group Limited (Promina) made a capital return of 23 cents per share in June 2005
     
  • The record date for entitlement to the capital return was 9 June 2005
     
  • The payment date for the capital return was 20 June 2005

Capital gains tax 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 $0.23, you must reduce the cost base and reduced cost base by $0.23.
     
  • For each share that had a cost base of less than $0.23
    • you made a capital gain equal to the difference between the cost base and $0.23 ($0.23 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 $0.23 per share on the return of capital.
     
  • If you acquired the shares on or before 19 June 2004, you may qualify for a discount capital gain on the return of capital.

Where to find more information

Tab Limited (takeover by Tabcorp)

What happened

  • Between 21 April 2004 and 13 August 2004, Tabcorp Limited Tabcorp) made a takeover offer for Tab Limited (Tab)
     
  • Tab shareholders who accepted the offer received $2.10 cash plus 0.2 Tabcorp shares for each Tab share
     
  • Tab shareholders who did not accept the offer before 7.30 pm Eastern Standard Time (EST) on 13 August 2004, had their shares compulsorily acquired on 20 September 2004. They received the same consideration as accepting shareholders

Tax implications

For capital gains tax purposes:

Rollover relief

  • Partial scrip-for-scrip rollover is available.
  • Rollover relief is not available for the cash amounts received.
  • The disposal date of the shares was
    • if you accepted the offer up to and including 5 July 2004 – 5 July 2004
    • if you accepted the offer between 5 July and 7.30 pm EST 13 August 2004 – the date you accepted the offer, or
    • if you did not accept the offer by 7.30 pm EST 13 August 2004 – 20 September 2004 (the date that your shares were compulsory acquired).
     

Where to find more information

  • See Class Ruling 2005/46 (Withdrawn) Income tax: scrip for scrip roll-over: acquisition of Tab Limited shares by Tabcorp Investments No 4 Pty Ltd
     
  • Phone us on 13 28 61

Westfield Group (capital restructure)

What happened

  • In July 2004, Westfield Holding Ltd (WSF) shares, Westfield Trust (WFT) units, and Westfield America Trust units (WFA) were stapled together in a merger
  • WSF, WFT and WFA investors who participated in the merger received Westfield Group stapled securities. Investors who did not participate received cash under the sale facility
  • The tax consequences depend on whether the share or unit holder chose the 'cash alternative', the 'exchange by sale alternative', or did nothing (these investors received a non-assessable payment which was used to acquire new securities)

Where to find more information

QC18216