Create your myGov account and link it to the ATO, Help and support to lodge your tax return, Occupation and industry specific income and work-related expenses, Residential rental properties and holiday homes, Instalment notices for GST and PAYG instalments, Your obligations to workers and independent contractors, Encouraging NFP participation in the tax system, Australian Charities and Not-for-profits Commission, Departing Australia Superannuation Payment, Small Business Superannuation Clearing House, Annual report and other reporting to Parliament, Complying with procurement policy and legislation. Everyone loves the silky smooth feeling of a fresh shave, but the actual process of maintaining it can be tedious and time-consuming. Neville decided he wanted the stapled securities sold so he did nothing. As mentioned earlier, unless specifically exempted, gains arising on the transfer of capital assets are chargeable to income tax as capital gains. (iii) Cost of acquisitionand period of holding of capital asset. As per the Act [72] , where a person carrying on business or profession (predecessor), has been succeeded by any other person (successor), who continues to carry on that business, then the successor can be held liable in respect of the: An issue that arises is whether transfer of business by way of merger / demerger amounts to succession of business. Theres an ASX announcement posted yesterday about this. The shareholders of the demerged company, under the scheme of demerger, would receive shares in the resulting company. all of the new interests are acquired on the date of the demerger . It is up to you to work out the cost base of your Woolworths shares, just as you would if you were selling your shares and had to work out what they cost you. Will you need the Individual tax return instructions supplement? A taxpayer should be able to contend that depreciation already claimed in years prior to AY 2021-22 be tested applying the ratio of the decision of Supreme Court in the case of Smifs Securities without any reference to the Memorandum to the Finance Bill, 2021 or the amendments which are in any case effective only from AY 2021-22. In FY21, Woolworths will incur separation costs of $50m. A regular commentator in the media, investment advisor and company director, he is also a Non-Executive Director of Tyro Payments Ltd and PEXA Group Limited. You may also have been allotted SCA Property Group stapled securities by participating in the Woolworths retail shareholders offer. Woolworths Group Limited was incorporated in 1924 and is based in Bella Vista, Australia. Youd be hard-pressed to find a more delicious, filling breakfast that can go from pantry to mouth in less time. Option 2 is a significant improvement over the status quo, as there would be no tax consequences which arise from holding shares in a demerged company. If you wanted your stapled securities sold in the sale facility, you did not need to do anything. This view has been endorsed by the Mumbai Tribunal [66] .Similarly, the Ahmedabad Tribunal has allowed the resulting entity to utilize MAT credit of demerged entity [ [67] ]. Any compromise or arrangement is defined under the Companies Act 2013, however, the said act is silent on demerger.Hence, the general meaning of demerger of the company can be termed as a kind of corporate restructuring whereby the company decides to part with one of its business activities to operate it under . In exercise of the powers conferred by the aforementioned proviso to section 50(2) of the Act, the CBDT vide Notification No. Even in this case, a plausible interpretation is that if entirety ofthe business is transferred to the resulting company, such that the demerged company is unable to continue the transferred business and continuity of business is preserved in the hands of the transferee companythere may be succession of business.The issue is however litigative and in absence of clarity on the issue it is important to review judicial developments on the subject when matter is being evaluated. I have a few questions, if anyone is happen to share what they know it would be much appreciated. The Company, following confirmation from the ATO, advises that the approved apportionment is 75% for Woolworths and 25% for Endeavour. Assume Neville has no other capital gains for the year and no current year or prior year unapplied capital losses. resulting company), which becomes the property of the taxpayer in consideration of a demerger, there shall be included the period for which the share or shares held in the demerged company were held by the taxpayer. Endeavour Group will incur additional corporate and operating costs of $47m pa for its ASX listing, share registry, funding facilities, insurance, workers compensation and maintaining a separate board and management team. The proposed demerger is subject to shareholder approval. 36.71.05. Neville's 200 stapled securities were sold in the sale facility and he was sent $326.94 ($1.6347 for each stapled security). Read the tax part of the demerger booklet? The only advantage of doing this is the saving on brokerage which on a tiny parcel of shares, could be considerable. // -->