The Commissioner of Taxation, Chris Jordan, gives notice of the following Rulings, copies of which can be obtained from ato.gov.au/law.
NOTICE OF RULINGS |
Ruling number | Subject | Brief description |
CR 2020/48 | Lendlease Corporation Limited – stapled securities acquired under the Placement or Security Purchase Plan | This Ruling sets out the capital gains tax consequences on acquisition for Lendlease Group security holders who acquired Lendlease Group stapled securities under the Placement or Security Purchase Plan announced on 28 April 2020 This Ruling applies from 1 May 2020 to 30 June 2020. |
CR 2020/49 | Gindalbie Metals Ltd - return of capital by way of in specie distribution | This Ruling sets out the tax consequences for shareholders of Gindalbie Metals Ltd who received a return of capital from Gindalbie on 23 July 2019. This Ruling applies from 1 July 2019 to 30 June 2020. |
Overview
The Australian Taxation Office has issued two rulings to clarify specific capital gains tax (CGT) implications for certain transactions involving stapled securities and returns of capital. CR 2020/48 addresses the capital gains tax consequences for Lendlease Group security holders who acquired Lendlease Group stapled securities under a Placement or Security Purchase Plan that was announced on 28 April 2020. This ruling applies from 1 May 2020 to 30 June 2020 and aims to provide clarity on the tax treatment of these acquisitions. Similarly, CR 2020/49 deals with the tax implications for shareholders of Gindalbie Metals Ltd who received a return of capital from Gindalbie on 23 July 2019. This ruling applies from 1 July 2019 to 30 June 2020 and is designed to elucidate the tax consequences of such distributions. Both rulings are intended to assist taxpayers in understanding their obligations and the tax effects of these specific financial transactions, thereby promoting compliance and clarity in the application of the relevant tax laws.
Scope and Application
The Commissioner of Taxation has issued Rulings CR 2020/48 and CR 2020/49 to clarify the tax implications of specific transactions for certain entities and their security holders. Ruling CR 2020/48 applies to Lendlease Corporation Limited, specifically addressing the capital gains tax consequences for security holders who acquired Lendlease Group stapled securities under the Placement or Security Purchase Plan announced on 28 April 2020. This Ruling is applicable from 1 May 2020 to 30 June 2020, providing clarity on the tax treatment for those involved in this particular transaction. Similarly, Ruling CR 2020/49 focuses on Gindalbie Metals Ltd, outlining the tax consequences for shareholders who received a return of capital by way of an in specie distribution on 23 July 2019. This Ruling applies from 1 July 2019 to 30 June 2020, ensuring that the relevant parties understand their tax obligations in relation to this specific distribution. These Rulings, accessible on the ATO website, aim to provide certainty and guidance to those affected by these transactions within the specified timeframes.
Key Provisions
The main operative sections of Ruling CR 2020/48 (section 1) address the capital gains tax implications for Lendlease Group security holders who purchased stapled securities under the Placement or Security Purchase Plan, which was announced on 28 April 2020. This Ruling provides clarity on how these transactions are to be treated for capital gains tax purposes, effective from 1 May 2020 to 30 June 2020. Similarly, Ruling CR 2020/49 (section 2) focuses on the tax consequences for Gindalbie Metals Ltd shareholders who received a return of capital from the company in the form of an in specie distribution on 23 July 2019. This Ruling outlines the tax treatment of such distributions, applicable from 1 July 2019 to 30 June 2020.
The obligations and requirements imposed by these Rulings on the relevant parties include ensuring compliance with the specified tax treatments outlined. For instance, Lendlease Group security holders must correctly account for their capital gains tax liabilities in accordance with the provisions of CR 2020/48. Likewise, Gindalbie Metals Ltd shareholders must follow the tax treatment instructions provided in CR 2020/49 when reporting their returns of capital. These Rulings provide a clear framework for both companies and their shareholders to understand and comply with the tax obligations arising from these specific transactions.
In terms of consequences for non-compliance, breaches of these Rulings could potentially lead to penalties. While the specific penalties are not detailed in the text, under the Income Tax Assessment Act 1936, penalties for underpayment of tax, among other things, can include interest on the unpaid amount, general interest charge, and in serious cases, penalties up to 75% of the unpaid tax. Additionally, the Commissioner may issue public rulings or private binding rulings to address specific issues, and failure to follow these can result in further administrative or legal consequences. It is essential for all parties to adhere strictly to the guidelines provided in these Rulings to avoid any adverse tax implications.