The Australian Tax Office (ATO) has important information listed on their Tax Tips for Shareholders webpage.
It is recommended that shareholders obtain independent advice if they are in any doubt as to tax implications relating to their BOQ holding. A list of authorised tax agents can be viewed on the ATO website.
Home Building Society shareholders
The Scheme Booklet for the Home Building Society (Home) and Bank of Queensland merger has a tax implications section with worked examples on pages 64 to 67.
Further information is available in the ATO Class Ruling for this merger.
FAQ relating to the Home merger
Q1. I received part shares in BOQ and part cash. Is the cash amount to be treated as a capital gain?
A. If the capital proceeds paid to Home shareholders in respect of their Home shares consist of cash as well as BOQ shares, a shareholder is able to choose only partial roll-over. Roll-over will not be available to the extent that any capital gain is attributable to the $2.80 cash paid per Home share.
A capital gain will eventuate where the total cash consideration received exceeds the cost base of the cash consideration. The following formulae can be used to calculate the cash consideration cost base:
Cost Base of x Value of cash consideration
Homes shares Value of share consideration
plus cash consideration
Q2. What is scrip for scrip rollover?
A. Scrip for scrip roll-over enables a shareholder to disregard all or part of a capital gain from a share that is disposed of as part of a corporate restructure, including a merger, if the shareholder receives a replacement share in exchange. A capital gain is only partially disregarded if, in addition to shares, there is cash consideration as part of capital proceeds.
Q3. Did I elect to have scrip for scrip rollover?
A. No formal election was required to be lodged in order to choose scrip for scrip rollover relief. Unless you contacted Bank of Queensland to elect not to have scrip for scrip rollover relief, than your tax return should be prepared in a manner consistent with electing scrip for scrip rollover relief.
Q4. I elected not to use scrip for scrip rollover. What taxation implications must I consider?
A. If you elected not to utilise scrip for scrip rollover, you can treat it as a disposal of your original holding (Home shares) for the value of the new shares (BOQ share value at implementation date), realising it as a capital gain.
Q5. I received new BOQ shares as a result of the merger, but have since sold these. What are the tax implications I must consider?
A. A Home shareholder who elects scrip for scrip rollover is deemed to have acquired the new BOQ shares at the same time as the Home shareholder acquired the original Home shares.
Q6. I sold my Home shares via the share sale facility. Is this a capital gain?
A. Normal tax implications apply for the sale of these shares.
Capital gains tax operates by having net gains treated as taxable income in the tax year an asset is sold or otherwise disposed of. If an asset is held for at least 1 year then any gain is first discounted by 50% for individual taxpayers, or by 33 1/3% for superannuation funds. Net losses in a tax year may be carried forward, but not offset against income.
Q7. Am I entitled to Capital Gains Tax (CGT) discount?
A. Individuals, trusts and complying superannuation funds who have held Home Shares for at least 12 months prior to disposal of those shares under the Scheme should be eligible to claim the CGT discount when calculating the capital gain. Individuals and trusts will be entitled to a CGT discount of 50%, while superannuation funds will be entitled to a CGT discount of 33 & 1/3%.
Companies are not eligible for the CGT discount.
StateWest Credit Society members
The Scheme Booklet for the StateWest Credit Society and Home Building Society merger contains tax information on pages 162 to 164.