Taxation of Australian Resident Individual Securityholders
The taxation commentary below assumes the investor in the Astro Group (securityholder) is an Australian resident individual taxpayer who holds their investment in the Astro Group on capital account. The commentary is intended as a brief guide only and is therefore general in nature. Taxation can be complex and may change over time. Accordingly, it is recommended that securityholders seek professional taxation advice in relation to their own position.
Taxation of Distributions
Securityholders will be required to include their share of the taxable income of AJT in their assessable income in the year in which their entitlement to the income of AJT arises. A securityholder’s share of the taxable income of AJT for the year ended 30 June must therefore be included in the securityholder’s assessable income for the financial year ended on that date. This applies irrespective of whether the securityholder’s share of the income of AJT is distributed (paid) to the securityholder in a subsequent year or reinvested in AJT.
Distributions from AJT may include various components, the taxation treatment of which may differ. It is expected that distributions from AJT could include both foreign sourced income (e.g. from the TKs) and Australian sourced income (e.g. from hedging contracts). A distribution from AJT to a securityholder may also include a tax-deferred component, a capital gains tax (CGT) discount concession component, as well as net capital gains and interest income.
Details of the tax components for distributions by the Astro Japan Property Trust can be accessed by clicking here . It is recommended that securityholders complete their income tax returns based on the tax component information set out in their individual Astro Group Annual Tax Statement. Please contact our security registry, Link Market Services, if you require a replacement copy of your Annual Tax Statement.
Foreign Tax Offsets
Japanese withholding tax will be imposed on distributions from the TKs. These distributions will be foreign sourced income of AJT and therefore will be foreign sourced income of the securityholders.
Securityholders may be able to claim foreign tax offsets for the Japanese withholding tax against the Australian tax payable on foreign sourced income.
For further information regarding foreign tax offsets, please click here. It is recommended that securityholders seek professional taxation advice in relation to their own position.
Australian Capital Gains Tax Considerations
A disposal of Stapled Securities will have CGT implications. Broadly, securityholders must include any realised capital gain or loss in the calculation of their net capital gain. A net capital gain must be included in the securityholder’s assessable income. A net capital loss may be carried forward until the securityholder has realised capital gains against which the net capital loss can be offset. It is noted that in calculating a net capital gain a securityholder may be entitled to a CGT discount where they have held their securities for 12 months or more.
A Stapled Security comprises two separate assets for capital gains tax purposes (one Astro Japan Property Trust unit and one Astro Japan Property Group Limited share.)
For capital gains tax purposes you need to apportion the cost of each Stapled Security and the proceeds on sale of each Stapled Security over the separate assets that make up the Stapled Security. This apportionment should be done on a reasonable basis.
One possible method of apportionment is on the basis of the relative Net Tangible Assets of the individual entities.
Relative Net Tangible Assets of entities in the Astro Japan Property Group
|Financial Year||Astro Japan Property Trust||Astro Japan Property Group Limited||Astro Japan Property Group Total|
|31 Dec 2009||93.4%||6.6%||100%|
|30 Jun 2010||96.7%||3.3%||100%|
|31 Dec 2010||96.1%||3.9%||100%|
|30 Jun 2011||95.5%||4.5%||100%|
|31 Dec 2011||95.2%||4.8%||100%|
|30 Jun 2012||94.7%||5.3%||100%|
|31 Dec 2012||93.9%||6.1%||100%|
|30 Jun 2013||93.8%||6.2%||100%|
|31 Dec 2013||95.3%||4.7%||100%|
|30 Jun 2014||95.3%||4.7%||100%|
|31 Dec 2014||95.2%||4.8%||100%|
|30 Jun 2015||95.3%||4.7%||100%|
|31 Dec 2015||96.1%||3.9%||100%|
|30 Jun 2016||96.2%||3.8%||100%|
|31 Dec 2016||96.0%||4.0%||100%|
Tax File Numbers and Australian Business Numbers
Securityholders are not required to quote a Tax File Number (“TFN”). However, if a securityholder has not quoted its TFN or declared a permitted exemption from quoting the TFN, tax is required to be deducted from any income distribution at the highest marginal tax rate plus Medicare levy (currently 46.5 per cent).
Securityholders that hold securities as part of their business may quote their Australian Business Number instead of their TFN.
Consolidation of Stapled Securities – Taxation Summary for Securityholders
As noted in the Notice of Meeting and Explanatory Memorandum dated 7 October 2010, click here to download the PricewaterhouseCoopers summary of the expected income tax implications for stapled securityholders arising from the proposed security consolidations.