TAA 1953 Accordingly, all shareholders are encouraged to seek their own professional advice in relation to their tax position. Maria must reduce the cost base of her shares by $2,500 to $1,055.80. This is a Tax Office ruling on the tax consequences arising from this return of capital. Corporations Act 2001 256C. Specifically, the provision applies where: 48. 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. 18. a capital payment (it was not classed as a dividend for any purpose and had no dividend component). 65. Mark has not made a capital gain on his shares as a result of the capital return so he does not have to put anything on his 2003-04 tax return to reflect this event. The Record Date for the return of capital is expected to be on 15 November 2013. As a result of the return of capital, you must adjust the cost base of your Wesfarmers shares. Wesfarmers is an Australian-resident company listed on the Australian Securities Exchange since 1984. 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. 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). ITAA 1936 6(1) Make sure you have the information for the right year before making decisions based on that information. Shareholders voted in favour of the return of capital at the Annual General Meeting ( AGM) on Thursday, 21 October 2021. ITAA 1997 Div 197 The capital loss is equal to the amount of the difference (subsection 104-25(3)). The return of capital was considered and approved by shareholders at the 2021 AGM. ITAA 1997 995-1(1) This method was seen as the most equitable way of returning a portion of surplus capital in cash to all shareholders. Annual General Meeting, at which shareholders voted to approve the return of capital. 9. 16. ITAA 1997 109-5 share capital, Legislative References: Wesfarmers primary objective is to deliver satisfactory returns to shareholders through financial discipline and strong management of a diversified portfolio of businesses. Wesfarmers Limited was founded in 1914 and is headquartered in Perth, Australia. Last date for trading in cum return of capital for shares. The arrangement involving Wesfarmers return of capital to the Wesfarmers shareholders will constitute a 'scheme' for the purposes of section 45B. 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). Under with section 112-25 of the ITAA 1997, the consolidation of Wesfarmers shares will not result in a CGT event happening where the company converts its shares in accordance with section 254H of the Corporations Act. Sections 45A, 45B and 45C of the ITAA 1936 do not apply 8. Section 45B - scheme to provide capital benefits. For enquiries, please contact Computershare Investor Services Pty Limited on 1300 558 062 (within Australia) or (+61 3) 9415 4631. The return of capital . . Since 2009, Wesfarmers has reported the following retained earnings: 17. Wesfarmers shareholders received a 200 cents per share cash distribution. 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. A Wesfarmers shareholder 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. The Payment Date is anticipated to be late November to early December 2013. TD 2000/10, Subject References: 24. 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. Subsection 975-300(3) of the ITAA 1997 states that an account is not a share capital account if it is tainted. Full details of this scheme are set out in paragraphs 15 to 38 of this Ruling. The purpose which causes section 45B to apply may be the purpose of any party to the scheme. Section 45A applies in circumstances where capital benefits are streamed to certain shareholders (the advantaged shareholders) who derive a greater benefit from the receipt of capital and it is reasonable to assume that the other shareholders (the disadvantaged shareholders) have received or will receive dividends. The right to receive the payment of the return of capital is one of the rights inherent in a Wesfarmers share at the Record Date. In broad terms, section 45B of the ITAA 1936 applies where: 49. The capital return was completed on 18December 2003. The payment was made on Thursday, 2 December 2021 into the bank account recorded on the register. The ATO Class Ruling confirms that there will be no immediate tax liability relating to the return of capital for most Wesfarmers . The Commissioner makes this Ruling based on the precise scheme identified in this Ruling. Shares commence trading on an ex return of capital basis. In November 2007, Coles Group Ltd (Coles Group) was acquired pursuant to a scheme of arrangement. 20. For the shares you made a capital gain on - reduce their cost base and reduced cost base to nil. 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 ). Foreign-resident shareholders able to disregard capital gains tax. Part 5 - Further information 5.1 Has the +entity applied for an ATO class ruling relating to this cash return of . If you provided your direct credit payment instructions by 4:00pm (Perth time) on Friday, 19November2021, the return of capital payment was made on Thursday, 2 December 2021 by direct credit to your financial institution if your registered address is in Australia, New Zealand or the UK. 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. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. All Wesfarmers shareholders on 15 December 2003 (the record date) received the capital return. 36. The principal asset test is passed in the case of shares in a company if the sum of the market values of the company's assets that are taxable Australian real property exceed the sum of the market values of the company's other assets. ITAA 1936 45B(9) The application of sections 45A, 45B and 45C to the return of capital. ITAA 1997 975-300 Under the return of capital, all shareholders were treated in the same manner. Distributed by Public, unedited and unaltered, on 08 December 2021 06:41:05 UTC. The capital return on your shares is a capital gain tax event that may have resulted in a capital gain for you. The Class Ruling does not apply to Wesfarmers shareholders who hold their shares on revenue account or as trading stock. Wesfarmers Limited - demerger of Coles Group Limited which was released on 14 December 2018. The Commissioner will not make a determination under either ITAA 1997 Div 110 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. If you participated in the Loan Plans the payment for these shares was applied to each outstanding loan balance. ITAA 1936 44(1) 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 was $2.50 per share. After the share consolidation, Wesfarmers shareholders will own fewer shares that are proportionately higher priced. We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations. A Wesfarmers shareholder who is a foreign resident or the trustee of a foreign-resident trust for capital gains tax (CGT) purposes, and received the return of capital, can disregard any capital gain made if CGT event G1 happened or disregard any capital gain or capital loss if CGT event C2 happened under section 855-10, provided also that your Wesfarmers share or your right to receive the return of capital on the Wesfarmers shares: 15. NEWS 11 September 2013 ATO CLASS RULING ON CAPITAL RETURN PROPOSAL The Australian Taxation Office has published a Class Ruling relating to. The return of capital was debited to Wesfarmers' share capital account and the following accounting entry was recorded: 27. 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). 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). ITAA 1936 47 Collectively, shareholders received a total distribution of approximately $1,143 million. 25. 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. The share consolidation is conditional upon the approval by shareholders of an ordinary resolution. 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. 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. Our diverse business operations cover: home improvement and outdoor living; apparel and general merchandise; office supplies;health, beauty and wellbeing; and an Industrials division with businesses in chemicals, energy and fertilisers, and industrial and safety products. 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 Payment Date is anticipated to be in mid to late December 2014. 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. 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). 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