CR 2018/38 – Metcash Limited – Div 16K treatment of ‘off-market’ share buy-back and various dividend anti-avoidance rules

On Wed 29.8.2018, the ATO issued Class Ruling CR 2018/38 (Metcash Limited – Off-market share buy-back).

• This ruling considers the tax consequences for Metcash shareholders who dispose of their ordinary shares under an off-market share buy-back announced on 25 June 2018.
• The ATO treats the buy-back as an off-market purchase under Div 16K ITAA 1936.
• Importantly, the Commissioner will not seek to apply various dividend anti-avoidance rules (in ss 45A, 45B, 45C and 177EA ITAA 1936 and s 204-30 ITAA 1997) to the scheme.

DATE OF EFFECT: 1 July 2018 to 30 June 2019.

FJM 19.9.18

[LTN 166, 29/8/18; Tax Month – August 2018]