ITAA 1936 45C(1) Commissioner of Taxation The Record Date for the return of capital is expected to bein late November or early December 2014. 55. 70. 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. Wesfarmers is an Australian-resident company listed on the Australian Securities Exchange since 1984. 23. The Class Ruling confirms the availability of demerger tax relief for certain Wesfarmers shareholders. 26. 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). 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? The return of capital . The Payment Date is anticipated to be in mid to late December 2014. 76. How much did I receive and how was the payment made? If you participated in the Loan Plans the payment for these shares was applied to each outstanding loan balance. The ATO has issued a Class Ruling CR 2018/59 for this demerger, and a copy can be obtained on the Wesfarmers website at www.wesfarmers.com.au. 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). 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. 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. 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. 65. Section 855-15 sets out the categories of CGT assets that are taxable Australian property: 63. Class Ruling CR 2014/76 Page status: legally binding Page 1 of 29 Class Ruling . Sections 45A, 45B and 45C of the ITAA 1936 do not apply 8. The Australian Taxation Office has given Wesfarmers the all-clear to hand over $1.1 billion to shareholders. 48. In determining whether to recommend to shareholders the approval of the return of capital, the Board reviewed Wesfarmers' assets, liabilities and expected cash flows. 6. 19. Wesfarmers anticipates that it will pay a fully franked dividend of approximately $1.2 billion ($1.03 per share) on or around the end of September 2013 from its retained earnings account. 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. How do I provide, update or check my bank account details? 16. 34. ITAA 1997 995-1(1) This is clearly marked. TAA 1953 Wesfarmers Limited was founded in 1914 and is headquartered in Perth, Australia. ITAA 1936 45B(8) The ATO Class Ruling confirms that there will be no immediate tax liability relating to the return of capital for most Wesfarmers . ITAA 1936 45B(5)(b) 17. 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. 66. 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. Accordingly, the Commissioner will not make a determination under subsection 45A(2) 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. The return of capital satisfies the first two conditions. . 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. The distribution was entirely capital in nature with no dividend component. 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 The requisite purpose does not have to be the most influential or prevailing purpose but it must be more than an incidental purpose. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then: 7. If the return of capital is approved by shareholders at the 2013 . 71. The amount of the capital gain is equal to that excess. 38. The question is whether it would be concluded that a person who entered into or carried out the scheme did so for the purpose of obtaining a tax benefit for the relevant taxpayer in respect of the capital benefit. As announced on Friday, 27 August 2021, the Wesfarmers Board recommended a return of capital to Wesfarmers shareholders of 200 cents per share. 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). 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 cost base of a Wesfarmers shareholder's right to receive the return of capital is worked out under Division 110 of the ITAA 1997 (modified by Division 112 of the ITAA 1997). This payment was: The right to receive the payment (being an intangible CGT asset) will end by the right being discharged or satisfied when the payment is made. The summary in these documents and in this section is general in nature and should not be relied upon as advice. If the amount of the return of capital of $2.00 per Wesfarmers share is not more than the cost base of your Wesfarmers share, the Cost base / reduced cost base of the share are reduced (but not below nil) by the amount of the return of capital (subsection 104-135(4)). Unless the amount of the distribution exceeds the cost base of the shares, there will only be a cost base reduction under CGT event G1 (section 104-135 of the ITAA 1997). A Wesfarmers shareholder who is a foreign resident just before CGT event C2 happens, disregards any capital gain or capital loss made when CGT event C2 happens if their right to the return of capital is not 'taxable Australian property' (section 855-10 of the ITAA 1997). Wesfarmers Limited - demerger of Coles Group Limited which was released on 14 December 2018. What was the capital return?Wesfarmers made a cash payment to shareholders of 200cents per share (or approximately $2,268 million in total). 29. Maria must also adjust the cost base and the reduced cost base of her Wesfarmers shares to nil. 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). 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. 13. Details of this re turn of capital are set out in paragraphs 14 to 46 of this Ruling. On 3November 2003 Wesfarmers Limited announced a return of capital ('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). 65. 61. The new cost base for his share parcel is $2,550 ($3,050 - $500), or $12.75 per share. 9. according to an ATO ruling. All legislative references in this Ruling are to the Income Tax Assessment Act 1997, unless otherwise indicated. TD 2000/10, Subject References: The Wesfarmers Dividend Investment Plandid not apply to the return of capital payment. Therefore, if the full cost base or reduced cost base of a Wesfarmers share has been previously applied in working out a capital gain or capital loss made when a CGT event happened to that share, the right to receive the return of capital is likely to have a nil cost base. 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. Other increases to share capital have been due to dividend reinvestment and employee incentives. 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. Distributed by Public, unedited and unaltered, on 08 December 2021 06:41:05 UTC. The capital return was $2.50 per share. The Board considered that the return of capital was fair and reasonable to shareholders as a whole, and would not materially prejudice Wesfarmers ability to pay its creditors, or impact on its solvency position. Shareholders were sent the payment advice for the return on capital payment by email or in hard copy on Thursday, 2 December 2021. A Wesfarmers shareholder who is a foreign resident just before CGT event C2 happens, disregards any capital gain or capital loss made when CGT event C2 happens if their right to the return of capital is not 'taxable Australian property' (section 855-10 of the ITAA 1997). On 3 November 2003 Wesfarmers Limited announced a return of capital ('capital return'). 3. As a result, you will, in those circumstances, make a capital gain equal to the capital proceeds, being $2.00 per Wesfarmers share owned at the Record Date. 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. 39. A maximum of approximately 9.57% of Wesfarmers shares are pre-CGT assets. This amount represents your capital proceeds. 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. ITAA 1936 45B(2)(a) Will my shares be worth less after the capital return? ITAA 1936 45B(2)(c) ITAA 1936 45B(3) Taxation Administration Act 1953. Maria must reduce the cost base of her shares by $2,500 to $1,055.80. ITAA 1936 45A Wesfarmers operates a diverse business which covers home improvement, office supplies, department stores and an industrials division with businesses in chemicals, energy and fertilisers, and industrial and safety products. You can treat a capital gain made when CGT event G1 or CGT event C2 happened as a discount capital gain if you acquired your Wesfarmers shares at least 12 months before the Payment Date (subsection 115-25(1)), provided the other conditions in Subdivision 115-A are satisfied. 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