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Alinta - cash out option Expand / Collapse
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Posted 26/08/2008 8:41:36 PM


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The steps below outline the methods for processing the Alinta events that affected several MySF Manager users. These steps were prepared based on the statement example document provided by Alinta as well as the relevant ATO documents and documents sent to us by MySF Manager users. Thank you to those who have assisted us by sending in helpful information.

These steps outline the cash out option only. The default consideration is described in a separate posting.

Please ensure that you read all relevant documents, many of which are available from here. Please also check all information with your accountant, financial advisor and/or ATO.

Before starting please make sure that you have a clearing bank account in your system already and process these entries using that clearing account. This ensures that there is no interference with any of the fund’s real bank accounts.

While processing acquisitions in steps 4 – 8 please ignore prompts to process opening balances. This will be done once, in step 10.

1.
Record fully franked dividend for Alinta (section I.i) to a clearing account. This takes care of the details under “APA Distribution – Fully Franked Dividend”, shown on page 3, step 3 to 6.

2.
Record return of capital (section I.ii) to a clearing account. Note that this includes the residual income that was paid in cash. This takes care of the details under “APA Distribution – Fully Franked Dividend”, shown on page 3, step 3 to 6.

3.
Record one or more sales of existing Alina units at their cost base using the clearing account. You may wish to process one sale for each holding to ensure that the transactions do not produce a capital gain or loss at this point.

Details for some of the points below can be found on page 6 of the guide. Please change the number of units shown in accordance with the information you received in your statement.

The steps below differ from those posted for the default consideration because there is no need to split the stapled securities to their components as hey are sold in steps 11 - 15.

4.
Record the acquisition of
108 APA Stapled securities at 3.765 each
For the same date as the original Alinta acquisition. Choose your date if you had several purchase dates for Alinta**.

5.
Record the acquisition of
271 BBI stapled securities at 1.710 each
For the same date as the original Alinta acquisition. Choose your date if you had several purchase dates for Alinta**.

6.
Record the acquisition of
241 BBP stapled securities at 2.882 each
For the same date as the original Alinta acquisition. Choose your date if you had several purchase dates for Alinta**.

7.
Record the acquisition of
94 BBW stapled securities at 1.669 each
For the same date as the original Alinta acquisition. Choose your date if you had several purchase dates for Alinta**.

Note that the total of steps 4 to 7 are the same as the totals of B – E on page 2 of the document linked above, though there may be a small difference due to roundings in the document. (There is a $1 in the sample document provided online.)

8.
Record the acquisition of
576 units of BBI exchangeable preference shares (EPS) at a “reasonable cost base”
Please refer to the Tax Guide and Alinta Share Scheme Participant Tax Statement for what is considered reasonable.

9.
Record the cash component of the base offer as a separate income item.

10. If the date you used in steps 4 – 8 falls within the current financial year of your fund then you would have seen various transactions generated in steps 4 – 8 and you can skip to step 11.

If you saw prompts to create opening balances and clicked ‘No’ in accordance with the directions at the top of this document then please follow the directions below to create opening balances now.

Go to System Setup > Load Opening Balances. Scroll down through the asset list and find the accounts representing the assets added in steps 4 – 8. Tick the boxes next to the accounts and you should find that a value appears automatically in the DR column.

After you have ticked the lines for all accounts representing the assets added in steps 4 – 8 please go to the top of the asset accounts and type the value that appears in the DR total into the CR line for the clearing account.

You should find that the debit and credit totals equal. Click Process to post the transaction.

** The date of the acquisition of the original units should be retained for ‘rollover relief’, so the full answer here would be to split the units according to the purchases of Alinta and have several different parcels. However, given the complexity of the event this may not be practical and you may choose to ignore the various parcels and choose just one purchase date. Please ensure that you check all this information in this post with the ATO and your financial advisor or accountant before making a decision regarding this matter.


11.
You now have all of the new assets in the fund and have no more Alinta units. It is time to process the sales and realise gains and losses.

12.
Sell all of the BBI EPS holding at 0.904 each
Sell all of the BBI stapled securities at 1.650 each
Sell all of the BBP stapled securities at 2.92 each
Sell all of the BBW stapled securities at 1.65 each
Sell all of the APA stapled securities at 3.75 each

(the information for step 12 is shown on page 2 of the sample document linked from the top of this post)
See page 4 of Alinta Share Scheme Participant Tax Statement for more information


Regards,

MySF
Post #4025
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