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.
In August 2014, BHP Billiton (BHP) announced a plan to demerge a selection of the Group’s non-core assets to create an independent company, subsequently named South32 (S32).
The demerger was approved on 6 May 2015 and implemented on 24 May 2015.
Refer to the following documents for more information.
In summary, for each BHP share held as at 20 May 2015, the shareholder received one S32 share. (See Class Ruling 2015/40 - Point 19)
The cost base split for the demerger is as follows:
- BHP - 92.9%
- S32 - 7.1%
The fund held 2000 BHP shares as at 20 May 2015 which is the record date. (See CR 2015/40 Point 19).
| Purchase Date | Units |
|---|---|
| 17/07/1994 | 1000 |
| 01/02/1997 | 1000 |
| Total as at 20 May 2015 | 2000 |
The fund has therefore received 2000 S32 shares.
As the BHP shares were acquired after 19 September 1985 (Post-CGT), the S32 shares received are taken to have been acquired on the same date the corresponding BHP shares were acquired. (See CR 2015/40 Point 41).
This is the case irrespective of whether the fund chooses the demerger rollover relief or not.
For BHP shares purchased before 20 September 1985 (Pre-CGT)
In this case, shareholders have two options:
- Use the demerger rollover relief and use the original BHP purchase date for the new S32 shares.
- Do not use the demerger rollover relief and use 24 May 2015 as the purchase date for the new S32 shares. See Points 36, 37 and 41 in CR 2015/40.
- From the Main Toolbar, select Investments | Corporate Actions.
- From the Corporate Actions dashboard, locate the corporate action with the description "1:1 DIST OF SHARES IN SOUTH32 LIMITED" and select Process.
- BHP (security type), demerger (corporate action type), chart account, ex-balance and corporate action dates will be automatically selected by Simple Fund 360.
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Next to Select New Security, select Add New Investment. If the South32 Investment Account already exists for that fund, Simple Fund 360 will automatically select the account.
- Input the rest of the demerger details. For the demerger split percentages, see CR 2015/40 Point 64.
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Review the Corporate Action Summary panel and ensure the details are correct.
- Select Process Corporate Action and the demerger transaction will be posted to the Transaction List.
- Review your investment reports to check if the current investment holdings and costs are correct.