Three Class Rulings were released by the ATO on Wed 24.1.2018:
- CR 2018/4 – Australian Government Bond holders electing to exchange bonds for CHESS Depository Interests (CDIs). It states that CGT event H2 will occur when a bondholder chooses to exchange a bond for a CDI in that bond, but that there will be no capital gain or loss due to a lack of capital proceeds and incidental costs. Date of effect: 1 July 2018 to 30 June 2022;
- CR 2018/5 – Scrip-for-scrip roll-over: acquisition of units in EQT Emerging Companies Fund by SGH Professional Investor Emerging Companies Trust. It provides that unitholders who made a capital gain from disposing of their EQT Emerging Companies Fund units to the responsible entity of SGH Professional Investor Emerging Companies Trust can choose scrip for scrip roll-over. Date of effect: 1 July 2017 to 30 June 2018;
- CR 2018/6 – Tatts Group Limited Scheme of Arrangement and payment of Special Dividend. This ruling considers the income tax and CGT consequences for ordinary shareholders of Tatts Group Limited who received special dividends following the company’s December 2017 merger with Tabcorp Holdings Limited. In particular, it states that scrip for scrip roll-over is available and that various anti-avoidance rules do not apply to the scheme. Date of effect: 1 July 2017 to 30 June 2018.
28 January 2018
[LTN 16, 24/1/18; Tax Month January 2018]
Study questions (answers below*)
- Will bond holder exchanging for CDI’s have a capital gain?
- Will the unit holders in EQT Emerging Companies Fund have a capital gain?
- Will the Tatts shareholders have a capital gain as a result of the merger with Tabcorp?