Note:
Please note that BGL does not provide accounting or taxation advice. The following article is designed per ATO Ruling to act as a guide for Simple Fund/Simple Invest 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other more suitable methods may be used instead of these steps.
ATO Ruling: CR 2025/28
Overview
On 7 April 2025, Charter Hall Group (CHC) announced a capital reallocation which is scheduled for implementation on 11 April 2025.
Charter Hall Group (CHC) securities are comprised of:
- Charter Hall Limited (CHL) shares
- Charter Hall Property Trust (CHPT) units.
This capital reallocation involves the transfer of capital from Charter Hall Limited (CHL) to Charter Hall Property Trust (CHPT).
The reallocation involved 84.56 cents per security, which includes:
- A capital return of 24.52 cents per share
- A fully franked dividend of 60.04 cents per share
Securityholders will not receive any cash, shares or units as part of the reallocation.
Instructions:
- Return of Capital: If the stapled CHC investment was recorded in one account, no journals are required to be posted as the capital reduction from CHL is transferred to CHPT, which are all stapled in the same investment account.
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Special Dividend: The special dividend will increase the cost base of CHPT by 60.04 cents per share.
Journal Entries to be posted are:
DR CHC Invest account 60.04 cents per share (cost base adjustment)
CR 23800 CHC distribution income account 60.04 cents per share - In the more details section of the credit entry, enter the franked dividend and franking credits component.
Example:
The BGL Superannuation Fund held 1,600 units of Charter Hall Group (CHC).
As part of the Capital Reallocation, the fund receives a special dividend of $960.64 with franking credits of $411.68.
- In the Transaction List screen, create a Journal Entry.
- Record the following journal:
Date: 11/04/2025
Dr 78200/ CHC 0 units $960.64
Cr 23800 / CHC $960.64 - In the ‘More Details’ section of the distribution income, record the franked and franking credits.
- Once completed, select Post.
FAQ
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Will the Charter Hall Group (CHC) distribution system tax data include the franked and franking credits tax components from the Capital Reallocation corporate action?
Answer: No, the system tax data will not include the franked and franking credits received from the Capital Reallocation corporate action.
This is in line with CHC’s position that ‘the capital reallocation is not expected to have any impact on CHC distribution policy’.