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/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 2022/60
Overview
BHP shareholders will receive an in-specie dividend in the form of Woodside Petroleum Ltd (Woodside / WDS) shares in connection with the merger of BHP and Woodside.
The in-specie dividend is scheduled to be paid on 1 June 2022 and will be fully franked.
Eligible BHP shareholders will receive one newly issued Woodside share for every 5.5340 BHP shares they hold at the close of business on 26 May 2022 (Record Date).
Eligible small BHP shareholders holding 1,000 ordinary BHP shares or UK depositary interests or less may elect to have the Woodside shares they are entitled to receive sold under the sale facility.
For further information, please refer to ASX file and updates from the BHP Webiste:
Instructions
This article provides guidance on processing the BHP in-specie dividend on 1 June 2022 in connection with the Woodside merger. Depending on whether:
- A. Entity did not elect to participate in the related sale facility, or
- B. Entity elected to participate in the related sale facility and is eligible for the In-Specie Dividend.
A. Entity did not elect to participate in the related sale facility.
Example
An Entity has 100 units of BHP eligible for the In-Specie Dividend and the Entity did not elect to participate in the related Sale Facility.
Therefore, 18 Woodside shares were allotted with franking credits attached on 1 June 2022.
Step 1: Go to Transaction List and select Journal.
Step 2: Enter transaction details
Enter Date as of 01/06/2022
Account Name | Account Code | Units |
Debit |
Credit |
Woodside Investment |
77600/WDS.AX |
18 |
$535.68 |
|
BHP Dividends Received |
23900/BHP.AX |
|
|
$535.68 |
Click ‘More’ for the transaction related to 23900/BHP.AX
The system should have auto-populated the franking credits.
Please review to ensure it matches with the dividend statement.
Step 3: Click ‘Post’ once the details have been entered.
The journals posted will be as below:
B. Entity elected to participate in the related sale facility and is eligible for the In-Specie Dividend.
Example
An Entity has 393 units of BHP eligible for the In-Specie Dividend and the Entity elected to participate in the related Sale Facility.
The entity was deemed to have been allotted 71 units of Woodside on 01 Jun 2022.
In this example, on 20 Jun 2022, the entity sold WDS shares and received the sale proceeds of $2,069.65.
Step 1: Go to Transaction List and select Journal to record the Woodside shares and the In-Specie Dividends.
Step 2: Enter transaction details
Enter Date as of 01/06/2022
Account Name | Account Code | Units |
Debit |
Credit |
Woodside Investment |
77600/WDS.AX |
71 |
$2,112.96 |
|
BHP Dividends Received |
23900/BHP.AX |
|
|
$2,112.96 |
Click ‘More’ for the transaction related to 23900/BHP.AX
The system should have auto-populated the franking credits.
Please review to ensure it matches with the dividend statement.
Step 3: Click ‘Post’ once the details have been entered.
The journals posted will be as below:
Step 4: Go to Transaction List and select Bank Statement to record the sale proceeds.
Step 5: Enter transaction details
Enter Date as 20/06/2022
Account Name | Account Code | Units |
Debit |
Credit |
Bank |
60400/Bank |
|
$2,069.65 |
|
Woodside Investment |
77600/WDS.AX |
71 |
|
$2,069.65 |
Click ‘More’ for the transaction related to 77600/WDS.AX
Update the Contract Date to 01/06/2022 per ATO Ruling and ensure the correct parcel has been selected for disposal.
Step 6: Click ‘Post’ once the details have been entered.
The transaction posted will be as below:
In this example, it has resulted in a capital loss for the entity.
Please refer to the following help article on how to process an investment disposal.
FAQ on the BHP Demerger from the Corporate Action screen
1. Can I process this BHP and WDS Demerger from the Corporate Action screen?
The BHP demerger is no longer available to be processed from the Corporate Action screen as the corporate action data received was not accurate based on the ATO class ruling.
2. What if I have already processed the BHP Demerger from the Corporate Action screen?
Users can select the processed corporate actions under the Processed Tab and click on Delete to reverse the corporate action.
Record the journals above to process the BHP corporate action.