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How should I treat BGP Holdings Distribution Payment made on 30/10/2017 ?

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Enthusiast

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I have a Distribution Statement from BGP Holdings which paid me a Total Payment of a certain amount into my bank account on 30/10/2017.

 

The Statement states that  “This is a distribution payment for a reduction of share premium”.

 

The Statement shows the amount paid under the headings labelled “Distribution Amount” and “Total Payment”.

 

However, an amount of $0.00 is shown under the labels “Unfranked Amount”, “Franked Amount” and “Franking Credits”.

 

As this appears to be a distribution payment for a reduction of share premium how should this income be treated?

 

If it is an assessable dividend income payment, how can it be declared in the Dividends section of MyTax if there is no Unfranked, Franked or Franking Credits amount that can be entered there?

 

If it is not dividend income, what type of income is it and how should it be treated and entered into MyTax?

 

 

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Most helpful response

Devotee Registered Tax Practitioner

Replies 0

This should be treated as a tax-deferred distribution => reduction of cost base.

I have been treating as a disposal because it is unlikely there will actually be any more $ coming.

 

If you search BGP Holdings, you find this:

 

 On October 30 BGP Holdings PLC paid a second distribution of A$ 0.02060274 per share. This distribution was a capital reduction, as approved at the Extraordinary General meeting on July 3, 2017. We expect this to be the last material distribution. There may be a fraction of a cent at the liquidation of the Company in 18 months or so, depending on the release of €20 million held in escrow accounts relating to the 2016 sale of BGP Investment and warranty insurance, but it is too early to assess this likelihood. Investors will be kept informed of developments as they occur

 

1 REPLY 1
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Most helpful response

Devotee Registered Tax Practitioner

Replies 0

This should be treated as a tax-deferred distribution => reduction of cost base.

I have been treating as a disposal because it is unlikely there will actually be any more $ coming.

 

If you search BGP Holdings, you find this:

 

 On October 30 BGP Holdings PLC paid a second distribution of A$ 0.02060274 per share. This distribution was a capital reduction, as approved at the Extraordinary General meeting on July 3, 2017. We expect this to be the last material distribution. There may be a fraction of a cent at the liquidation of the Company in 18 months or so, depending on the release of €20 million held in escrow accounts relating to the 2016 sale of BGP Investment and warranty insurance, but it is too early to assess this likelihood. Investors will be kept informed of developments as they occur