BGL does not provide accounting or taxation advice. The following is designed to act as a guide for Simple Fund 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other methods that are more suitable may be used instead of these steps.
The ATO have released the following: CR 2019/5 Income tax: BHP Group Limited - off-market share buy-back.
|Details||Amount per share|
|Excess of the Tax Value over the Buy-back Price.||$4.54|
(capital component + excess of the Tax Value over the buy-back price)
|Buy Back Price||$27.64|
The following components will need to be calculated for the fund's holding of BHP shares:
- Capital proceeds received (Sale Consideration)
- Excess of the Tax Value over the buy-back price
- Capital component of sale consideration
After this, a journal will need to be posted to process the share buy back
A fund with 1,000 BHP shares participated in the buy-back
The components of the transaction are calculated as:
- Capital Proceeds: $4.92 x 1,000 = $4,920
- Excess of Tax Value: $4.54 x 1,000 = $4,540
- Dividend: $27.26 x 1,000 = $27,260
- Bank receipt of buyback price: $27.64 x 1,000 = $27,640
The following journal will need to be posted in Simple Fund 360:
|Account Name||Account Code||Units||Debit||Credit|
This Investment Expense account had the Tax Label set to Not Applicable - Permanent Difference. See Non-deductible tax expense for more details on changing this.
If you wish to create a new account to record this permanent difference, please refer to Add an Account