Copyright Act 1968 21. 60. 19. A Wesfarmers shareholder will make a capital gain if the amount of the return of capital ($0.50 per fully paid share) is more than the cost base of the Wesfarmers share (subsection 104-135(3) of the ITAA 1997). 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 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. 24. Although a 'capital benefit' (as defined in paragraph 45A(3)(b)) will be provided to participating Wesfarmers shareholders under the return of capital, the circumstances of the return of capital indicate that there will be no streaming of capital benefits to some shareholders and dividends to other shareholders. 21. This publication (excluding appendix) is a public ruling for the purposes of the Taxation Administration Act 1953. 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). 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. 53. 36. 15. The Commissioner makes this Ruling based on the precise scheme identified in this Ruling. 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. 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 . ITAA 1936 318 As at March 2020, approximately 26.15% of Wesfarmers' shareholders are foreign residents (as defined in subsection 995-1(1)). The Commissioner will not make a determination under section 45A or 45B that section 45C applies to the return of capital. The payment was entirely capital in nature with no dividend component. shares held within the Deferred Plans at the time of the return of capital payment), the cost base for each share held on behalf of employees was reduced by the return of capital amount. 61. 16. 26. All Wesfarmers shareholders on 15 December 2003 (the record date) received the capital return. The return of capital was debited to Wesfarmers' share capital account and the following accounting entry was recorded: 27. In November 2007, Coles Group Ltd (Coles Group) was acquired pursuant to a scheme of arrangement. Wesfarmers Limited was founded in 1914 and is headquartered in Perth, Australia. Wesfarmers has paid franked dividends to its shareholders to the maximum extent available based on its franking account balance. 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. Part 5 - Further information 5.1 Has the +entity applied for an ATO class ruling relating to this cash return of . In broad terms, section 45B of the ITAA 1936 applies where: 49. 29. 20. The capital loss is equal to the amount of the difference (subsection 104-25(3)). Maria must reduce the cost base of her shares by $2,500 to $1,055.80. The return of capital was funded by a combination of Wesfarmers' available cash balances and existing debt facilities. Maria must also adjust the cost base and the reduced cost base of her Wesfarmers shares to nil. Will my shares be worth less after the capital return? 59. Did the Dividend Investment Plan (DIP) apply? Income tax: Capital management distribution: Wesfarmers Limited . 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'. This is clearly marked. The converted shares will have the same date of acquisition as the original shares to which they relate. 42. 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). This publication provides you with the following level of protection: This publication (excluding appendixes) is a public ruling for the purposes of the . For information on how to work out the cost base (and reduced cost base) for shares, see the Guide to capital gains tax. 29. ato class ruling wesfarmers return of capitalsiesta key luxury hotels on the beach ato class ruling wesfarmers return of capital. ITAA 1936 45B(9) Wesfarmers has obtained a Class Ruling CR 20from the ATO which governs the Australian tax21/87 treatment of the return of capital to Wesfarmers shareholders who hold their shares on capital account. You received 200 cents for every share you held as a registered holder on the record date of 4:00pm (Perth time) Friday, 19 November 2021. Taxation Administration Act 1953. It is anticipated that shareholder approval will be sought at the AGM scheduled for 7 November 2013. The return of capital was not eligible to participate in the DIP. capital reductions 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. 64. Aussie supermarkets set to capitalise on high inflation, but softer demand ahead, WESFARMERS LIMITED : Ex-dividend day for interim dividend, Out of lockdown, Kmart pushes Australia's Wesfarmers to higher profit, Transcript : Wesfarmers Limited, H1 2023 Earnings Call, Feb 15, 2023, Wesfarmers Raises Dividend as Fiscal H1 Profit, Revenue Increase, Australian Stock Exchange - 12:10:24 2023-03-01 am EST. For those employee shareholders who hold their shares within a New Zealand Wesfarmers employee share plan, are tax residents of New Zealand and only work in New Zealand, it is expected the return of capital payment will be treated as dividend income. Wesfarmers credited $12,733 million to its share capital account on the issue of Wesfarmers ordinary shares and partially protected ordinary shares to Coles Group shareholders in part payment for the acquisition of all the issued shares in Coles Group. 38. How did the capital return work and what was the effect on the company? The ATO has issued Class Ruling CR 2018/59 . 5. This is clearly marked. 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. Specifically, the provision applies where: 48. 17. The following is a detailed contents list for this Ruling: Accordingly, all shareholders are encouraged to seek their own professional advice in relation to their tax position. Where the original shares were acquired on or after 20 September 1985, subsection 112-25(4) of the ITAA 1997 provides that each element of the cost base and reduced cost base of the converted shares is the sum of the corresponding elements of each original share. Wesfarmers announced a proposed return of capital on 15 August 2013 with Wesfarmers returning to each shareholder $0.50 per fully paid share. Wesfarmers derived a net profit after tax of $1.335 billion from the disposal of the assets, which was paid to shareholders as special dividends in April 2019 and October 2020. 44. Payments made to credit unions may take longer. Class Ruling CR 2014/76 Page status: legally binding Page 1 of 29 Class Ruling . The return of capital satisfies the first two conditions. ITAA 1997 975-300(3) However paragraph (d) of the definition of dividend specifically excludes a distribution from the meaning of 'dividend' if the amount of the distribution is debited against an amount standing to the credit of the company's share capital account. Wesfarmers provided separate information in relation to the tax implications of the return of capital payment for participants who were located within Hong Kong and India at the time of the capital return payment. (iii) Employee shareholders who hold their shares within a Wesfarmers employee share plan. The uplift factor is worked out by dividing 123.4 by the consumer price index for the December quarter of 1986 (79.8) and is 1.546 (rounded to three decimal places). For more information on how to work out the cost base and the reduced cost base of shares, see the Guide to capital gains tax. CGT event G1 happened on the Payment Date when Wesfarmers paid you the return of capital of $2.00 for each Wesfarmers share you owned at the Record Date and continued to own at the Payment Date (section 104-135). 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. Collectively, shareholders received a total distribution of approximately $1,143 million. CGT events G1-G3 - shares 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. 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 . The following description of the scheme is based on information provided by the applicant. NO 1-PVCWOSF, Legislative References: The term 'dividend' is defined in subsection 6(1) of the ITAA 1936 and includes any distribution made by a company to any of its shareholders. 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