Australian Tax Implications
Australian Tax Implications of 2001 James Hardie Corporate Restructure
(Implementation of the Scheme)
Australian resident individuals
This information sets out the Australian capital gains tax implications of the 2001 corporate restructure for natural persons resident in Australia for income tax purposes. This information is provided as a guide only. It is not intended as financial advice and should not be relied upon as financial advice. This information does not apply to shareholders who hold their shares on revenue account or who are share traders.
The Australian capital gains tax implications of the Scheme will depend on whether you acquired your JHIL Shares after 19 September 1985 (post-CGT) or on or before 19 September 1985 (pre-CGT).
- Post-CGT Shareholders
The exchange of JHIL shares for JHI NV CUFS, which occurred as a result of the restructure, is a disposal of JHIL Shares for CGT purposes. If you make a capital gain from this disposal, you can choose to claim scrip-for-scrip rollover relief and not pay tax as a result of the exchange. You do not have to choose whether to claim scrip-for-scrip rollover relief until you lodge your tax return for the 2002 year.
If you make a capital loss from that disposal, you cannot claim rollover relief, but you will not pay any tax as a result of the disposal.
When calculating whether you make a capital gain or a capital loss on the disposal of your JHIL Shares you are taken to have received capital proceeds of JHI NV CUFS for their market value as at the close of business on 19 October 2001 being $4.36. That is, for each JHIL share you dispose of you are taken to have received capital proceeds of a JHI NV CUFS with a market value of $4.36.
What happens if you claim scrip-for-scrip rollover relief?
You do not have to do anything to claim scrip-for-scrip rollover relief other than to exclude any capital gain upon the disposal of your JHIL Shares from your assessable income in your tax return. If you do claim scrip-for-scrip rollover relief, the CGT cost base or indexed cost base that you have in your JHIL Shares will be transferred to your JHI NV CUFS. For the purposes of the discount concession, you will have a deemed acquisition date for your JHI NV CUFS. You are taken to have acquired your JHI NV CUFS at the time you acquired your JHIL Shares.
What happens if you don’t claim rollover relief?
If you make a capital gain on the exchange, you can chose not to claim rollover relief and you will be subject to tax on the gain. If you have held your JHIL Shares for at least 12 months as at the Implementation Date of the restructure on 20 October 2001 you can chose to claim the “discount concession” to reduce your taxable capital gain by half (but in that case you will not be entitled to indexation of your cost base).
Your cost base in the JHI NV CUFS that you receive will be equal to the last sale price of a JHI NV CUFS on the Scheme Record Date of 19 October 2001 being $4.36. You will be taken to have acquired the JHI NV CUFS on the Implementation Date of 20 October 2001.
- Pre-CGT Shareholders
The exchange of your JHIL Shares for JHI NV CUFS, which occurred as a result of the restructure, will be a disposal of your JHIL Shares for CGT purposes. You will not pay tax on any gain arising from this disposal nor be able to claim any capital loss. A gain upon future disposal of the JHI NV CUFS that you receive in exchange will, however, be subject to tax.
For CGT purposes, you will have a cost base in your JHI NV CUFS equal to the last sale price of JHI NV CUFS on the first day of trading on the ASX after the Implementation Date. That is the last sale price of JHI NV CUFS on 22 October 2001 being $4.44. You are taken to have acquired your JHI NV CUFS on the Implementation Date of 20 October 2001.