TIDMLRL TIDMLEN
RNS Number : 6719L
Leyshon Resources Limited
08 July 2014
LEYSHON RESOURCES LIMITED
8 July 2014
DEMERGER TAX COST BASE APPORTIONMENT
Leyshon Resources Limited (AIM/ASX: LRL) ("Leyshon Resources" or
the "Company") provides the following information to the Company's
Shareholders in relation to the demerger of Leyshon Energy Limited
(AIM: LEN) ("Leyshon Energy") through a return of capital by way of
a pro rata in-specie distribution which was completed on 23 January
2014. On the Record Date of 14 January 2014, Leyshon Resources
Shareholders received one share in Leyshon Energy for each Leyshon
Resources share held.
The potential taxation consequences of the distribution are
described in Section 3.15 of the Explanatory Memorandum that
accompanied the Notice of Meeting dated 9 December 2013. The
Company has not applied, and does not intend to apply, for a class
ruling from the Australian Tax Office in respect to the In-Specie
Distribution. The purpose of this announcement is to provide
guidance to the Leyshon Resources Shareholders of a reasonable
apportionment of the Capital Gains Tax ("CGT") cost base in their
Leyshon Resources shares between their existing Leyshon Resources
shares and their Leyshon Energy shares acquired through the
demerger.
The following summary only applies to Australian resident
Shareholders who, as of the Record Date, held their Shares on
capital account for tax purposes, and not on revenue account, and
are not subject to the taxation of financial arrangements rules in
relation to gains and losses on their Shares; and to non-Australian
resident Shareholders who, as of the Record Date, held an interest
in the Company of 10% or more.
Applying Demerger Relief
Australian resident Shareholders who choose demerger relief will
ignore any potential capital gain from the return of capital and
apportion the cost base of their Leyshon Resources shares between
those shares and the Leyshon Energy shares they received. The
apportionment is based on a reasonable approximation of the market
values of Leyshon Resources shares and Leyshon Energy shares just
after the in-specie distribution. Leyshon Resources considers that
at the relevant time, the value of Leyshon Energy shares
distributed represented 80.29% of the total value of Leyshon
Resources and Leyshon Energy shares. This apportionment has been
calculated based on volume weighted average price (vwap)
calculations for the first five trading days for the two entities
after completion of the in specie distribution. The ATO has
accepted this methodology in similar circumstances as outlined in
publicly available ATO Class rulings for similar transactions.
The following examples illustrate the way in which demerger
relief would apply.
Example:
You held 200,000 Leyshon Resources shares at 14 January 2014 for
which the cost base was $20,000 (10 cents per share).
You received 200,000 shares in Leyshon Energy in the
distribution.
The cost base of your Leyshon Energy shares will be 80.29% of
$20,000, which is $16,058 or 8.029 cents per share for the Leyshon
Energy shares.
The cost base of your Leyshon Resources shares will be reduced
to 19.71% of $20,000, which is $3,942 or 1.971 cents per share for
200,000 Leyshon Resources shares.
On a future disposal of the Leyshon Energy Shares, certain
Shareholders (such as individuals and complying superannuation
funds) may be entitled to a CGT discount if they have held their
Shares for at least 12 months. For these purposes, Shareholders can
treat their Leyshon Energy Shares as having been acquired on the
date that they acquired the corresponding original Leyshon
Resources Shares.
Not Electing Demerger Relief
An Australian resident Shareholder who does not choose demerger
roll-over relief will have the same tax consequences as a
Shareholder who does choose demerger roll-over relief, except that
any capital gain arising to the extent the In-Specie Distribution
exceeds the Shareholder's CGT cost base of the Shares will not be
disregarded. Shareholders may be entitled to discount CGT
treatment. Shareholders should seek appropriate tax advice to
determine the application of the CGT discount in their specific
circumstances.
If the In-Specie Distribution does not exceed the CGT cost base
in the Shares, no capital gain will be made. Shareholders will not
make a capital loss as a result of the return of capital under the
Demerger.
Shareholders who are not residents of Australia
Shareholders who are not residents of Australia for income tax
purposes will generally not have any Australian CGT implications
under the Demerger, unless their shares represent "taxable
Australian property". This will generally be the case where:
(i) they (together with associates) hold an interest in the
Company of 10% or more at the time of the In-Specie Distribution or
for a continuous period of at least 12 months in the 24 months
immediately preceding the In-Specie Distribution; and
(ii) certain other conditions relating to the underlying assets
of the Company are satisfied.
As such, if non-resident Shareholders do not hold, or have not
held, an interest in the Company of 10% or more as described above,
they should not be subject to Australian CGT under the Demerger. If
they do hold such an interest, they should consult their tax
adviser in relation to whether other relevant conditions are
satisfied as this may result in an Australian CGT liability.
Withholding tax implications have not been considered on the basis
that the entire demerger distribution has been treated as a return
of capital (i.e. no dividend component).
Disclaimer
In the Explanatory Memorandum, Leyshon Resources advised that
although it reasonably expected that capital gains tax demerger
relief would apply to the distribution it could not provide any
assurance that demerger relief would apply. Demerger relief is
complex and if you are in any doubt about your tax position you
should seek professional advice. This summary is not intended, and
should not be relied upon, as specific taxation advice to any
individual Shareholder. The comments in this summary are of a
general nature only, may not apply to your specific circumstances,
and cannot be relied upon for accuracy or completeness. This
information is provided for the guidance of shareholders and
neither the Company, nor any of its officers or advisers, accepts
liability or responsibility with respect to such consequences or
the reliance by any Shareholder on any part of the summary.
For further information please contact:
Leyshon Resources Limited
Corey Nolan - Managing Director
Tel: +61 7 3221 7770
admin@leyshonresources.com
RFC Ambrian Limited
Samantha Harrison (Nominated Adviser)
Kim Eckhof (Corporate broking)
Tel: +44 (0)203 440 6800
http://www.leyshonresources.com
Leyshon Resources Limited ABN 75 010 482 274
Level 3 / Suite 3, 1292 Hay Street, West Perth 6005, Western
Australia
Tel: + 61 8 9321 0077 Fax: + 61 8 9322 4073
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCSSFSEAFLSEEW
Leyshon Resources (LSE:LRL)
Historical Stock Chart
From May 2024 to Jun 2024
Leyshon Resources (LSE:LRL)
Historical Stock Chart
From Jun 2023 to Jun 2024