The Tax Office today issued a taxpayer alert designed to help shareholders make informed decisions whether to take up entitlements to a share offer based on the tax treatment of retail premium payments.
Tax Commissioner Michael D’Ascenzo said he is concerned some companies issuing share entitlements may be providing incorrect advice that retail premiums will be treated as capital for tax purposes.
“We are currently working with some companies who have made retail premium payments to help their shareholders understand and comply with their tax obligations,” Mr D’Ascenzo said.
“The Tax Office will be reviewing tax returns of shareholders who receive these payments, so I encourage people to check they have correctly accounted for any retail premium payments in their tax returns.
“People who find they have incorrectly declared these payments who come to us before we contact them for an audit will be entitled to a reduction in any penalties that might apply.”
People who are unsure about their obligations can request a private ruling from the Tax Office by calling 13 28 61.
More information
Taxpayer alert 2009/11 is available from www.ato.gov.au/atp
Please also refer to the revised Decision Impact Statement for the McNeil decision, which clarifies the distinction between the tax treatment of compensation for surrender of rights in respect of shares in companies and the legislative change in the treatment of the acquisition of such rights that followed the McNeil decision.
A fact sheet on how retail premiums should be treated for tax purposes is also available on the Tax Office website.
People who want information about these alerts should contact 1800 177 006.
Media release 2009/34
TAXPAYER ALERT
Taxpayer alerts are intended as an ‘early warning’ to taxpayers and their advisers of significant tax planning issues or arrangements that the Tax Office has under risk assessment or about which it has concerns.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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