ato class ruling wesfarmers return of capital

For example, if you held 1,000 shares as at the record date, you received 1,000 x $2.00 or $2,000 as the return of capital payment. The return of capital . Section 45B applies where certain capital payments are made to shareholders in substitution for dividends. 18. If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take. 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 . For your other shares - reduce the cost base and reduced cost base by $2.50 each. The return of capital was debited to Wesfarmers' share capital account and the following accounting entry was recorded: 27. Collectively, shareholders received a total distribution of approximately $2,268million. 41. The Commissioner makes this Ruling based on the precise scheme identified in this Ruling. A return of capital would ordinarily be subject to the CGT provisions of the income tax law. During the years ended 30 June 2018 to 30 June 2020, Wesfarmers disposed of a number of assets and received sale proceeds totalling $4.3 billion. 4:00pm (Perth time) Friday, 19 November 2021. This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. 2. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). 10. All legislative references in this Ruling are to the Income Tax Assessment Act 1997 unless otherwise indicated. There was no share consolidation in relation to the capital return. The phrase 'provided with a capital benefit' is defined in subsection 45B(5). 38. 41. However, the circumstances of the return of capital indicate that there was no streaming of capital benefits to some Wesfarmers' shareholders and dividends to other Wesfarmers' shareholders. She paid $2,200 ($2.20 per share) plus brokerage of $100 - making her cost base $2,300. 21. A copy of the Class Ruling is available from the Wesfarmers website (www.wesfarmers.com.au). We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations. The capital gain is equal to the amount of the excess. 10. The new cost base for his share parcel is $2,550 ($3,050 - $500), or $12.75 per share. As the right to receive the payment of the return of capital was inherent in the Wesfarmers share during the time it was owned, the right is considered to have been acquired at the time when the share was acquired (section 109-5 of the ITAA 1997). ITAA 1936 45B(2)(b) A scheme for the purpose of section 45B is defined under subsection 995-1(1) of the ITAA 1997 to include: 50. If the return of capital of $2.00 per Wesfarmers share you received was not more than the cost base of the share, the Cost base / reduced cost base of each share is reduced by the amount of the return of capital (subsection 104-135(4)). The Commissioner will not make a determination under either 58. We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations. ITAA 1936 45C(2) Therefore, if the cost base or reduced cost base of the 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 return of capital will have a nil cost base. Wesfarmers primary objective is to deliver satisfactory returns to shareholders through financial discipline and strong management of a diversified portfolio of businesses. WES Indicative Capital Return Timetable Effective Date All trading in WES ETO contracts will be on an adjusted basis effective on the ex-date, Thursday, 18 November 2021. Please refer to the Wesfarmers Limited 2021 Shareholder Tax Information Guide or the ATO class ruling. sold their shares while the shares were trading on a cum return of capital basis (i.e., before Wednesday, 17 November 2021); or. Will my shares be worth less after the capital return? The return of capital constituted an equal reduction of Wesfarmers share capital for the purposes of Part2J.Iof the Corporations Act 2001 (Cth). NO 1-PVCWOSF, Legislative References: ITAA 1997 104-135(3) How do I provide, update or check my bank account details? The return of capital was paid to each holder of a Wesfarmers share registered on the Wesfarmers share register on the Record Date. 37. CGT event C2 in section 104-25 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 but which they cease to own before the Payment Date. The summary in these documents and in this section is general in nature and should not be relied upon as advice. 53. It is anticipated that shareholder approval will be sought at the AGM scheduled for 7 November 2013. ITAA 1936 45B(9) 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. Accordingly, the principal asset test in section 855-30 will not be satisfied. ITAA 1997 Div 230 ITAA 1997 104-25 These included the divestment of Wesfarmers interest in the Bengalla coal mining joint venture, Curragh coal mine, Kmart Tyre & Auto, Quadrant Energy and 10.1 per cent of Wesfarmers post-demerger 15 per cent shareholding in Coles. Section 45A of the ITAA 1936 generally applies where: 45. You calculate your capital gain using the: Indexed cost base or discount method, whichever gives you the better result*, On or after 21 September 1999 and before 15December 2002, Discount method (after applying any capital losses - including unapplied capital losses from previous years). No capital loss can be made from CGT event G1 (Note 1 to subsection 104- 135(3)). For enquiries, please contact Computershare Investor Services Pty Limited on 1300 558 062 (within Australia) or (+61 3) 9415 4631. 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. ITAA 1997 Div 115 Each of these conditions is considered in this Ruling. purchased their shares after the shares started trading on an ex return of capital basis (i.e., from Thursday, 18 November 2021 onwards), the cost base for each share acquired after 19 September 1985 should be reduced by the return of capital amount (on a cents per share basis) for the purpose of calculating any capital gain or capital loss on the ultimate disposal of that share; and. 14. ITAA 1997 104-135 All registered shareholders on the record date received the capital return there was not an opportunity for these shareholders to 'opt out' of the capital return. 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). 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). This publication (excluding appendix) is a public ruling for the purposes of the Taxation Administration Act 1953. Accordingly, the Commissioner will not make a determination under subsection 45B(3) that section 45C applies to the return of capital. Wesfarmers announced a proposed return of capital on 15 August 2013 with Wesfarmers returning to each shareholder $0.50 per fully paid share. ITAA 1997 995-1(1) If there was any residual from the return of capital payment after the payment had been applied to your loan balance, the remaining balance was paid directly into your bank account on Thursday, 2 December 2021. 22. 58. On 3 November 2003 Wesfarmers Limited announced a return of capital ('capital return'). No part of the return of capital paid to you by Wesfarmers on the Payment Date is a dividend as defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). For the shares you made a capital gain on - reduce their cost base and reduced cost base to nil. The Class Ruling and further details regarding the return of capital can be accessed via the Investor Centre section of the Wesfarmers website at www.wesfarmers.com.au. This announcement was authorised to be given to the ASX by the Wesfarmers Company Secretary. The Commissioner will not make a determination under either The following tables sets out what method you can use. For information on the different methods you can use to work out your capital gain, see the Guide to capital gains tax. according to an ATO ruling. CGT events G1-G3 - shares 39. 16. Class Ruling CR 2014/76 Page status: legally binding Page 1 of 29 Class Ruling . The method you use to work out the amount to include in your item 17 calculations depends on when you acquired the shares. Make sure you have the information for the right year before making decisions based on that information. Wesfarmers' retained earnings (on a stand-alone basis) for the year ended 30 June 2021 was $697 million post-payment of the final dividend for the year. If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take. 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 ). 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. ITAA 1936 45C(1) CGT events C1-C3 - end of a CGT asset 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. As at 30 June 2021, Wesfarmers' share capital was $15.818 billion. Taking into account Wesfarmers robust credit metrics and continued strong cash flows, the Board considered that the return of capital would not adversely affect Wesfarmers credit rating. Accordingly, CGT event G1 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. Shareholders are sent return of capital payment advice. The payment of the return of capital to Wesfarmers shareholders will not be a dividend, as defined in subsection 6(1). She must use the indexed cost base method in all future events affecting these shares. 21. share capital, Legislative References: Taxation Administration Act 1953. 25. The relevant provisions dealt with in this Ruling are: All subsequent legislative references in this Ruling are to the ITAA 1936, unless otherwise stated. ATO references: You will make a capital gain from CGT event G1 happening if the amount of the return of capital of $2.00 per Wesfarmers share is more than the cost base of your Wesfarmers share. ITAA 1997 975-300 60. 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). Wesfarmers' return of capital will be recorded as a debit to the share capital account and Wesfarmers shareholders will receive a distribution of share capital to the value of $0.50 per share. The last date to purchase shares that were eligible to receive the return of capital was Wednesday, 17 November 2021. He paid $2,900 ($14.50 per share) plus brokerage of $150 - making his cost base $3,050, or $15.25 per share. Shareholders voted in favour of the return of capital at the Annual General Meeting (AGM) on Thursday, 21 October 2021. Using this method, Maria has made no capital gain on the return of capital, so she does not have to put anything on her 2003-04 tax return to reflect this event. ITAA 1936 45B(5) ATO Class Ruling - return of capital to shareholders. No part of the return of capital to a Wesfarmers shareholder will be a dividend, nor included in a shareholder's assessable income. 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. 51. ITAA 1936 45A(3)(b) For the year ended 30 June 2013, Wesfarmers' retained earnings will be $2,375 million ($1,160 million post final dividend). 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. | August 8, 2022 Copyright Act 1968 The return of capital was announced on 27 August 2021 and was approved by shareholders at the Wesfarmers Annual General Meeting on 21 October 2021. This payment was: How can I calculate my return of capital payment and when will I receive this payment? 21. What are the key dates for the capital return? 56. ITAA 1936 45A Wesfarmers raised the following equity to reduce debt and provide balance sheet flexibility: 12. As announced on Friday, 27 August 2021, the Wesfarmers Board recommended a return of capital to Wesfarmers shareholders of 200cents per share. 49. Maria must reduce the cost base of her shares by $2,500 to $1,055.80. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling. 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