The Australian Taxation Office (ATO) has issued a taxpayer alert designed to help shareholders make informed decisions over 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,” he explained, adding:
“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,” Mr D'Ascenzo finished.
According to the ATO, those who are unsure about their obligations can request a private ruling from the Tax Office.
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