Class Ruling CR 2024/20

What this ruling is about: 1. This Ruling sets out the income tax consequences for the holders of ordinary shares in Symbio Holdings Limited (Symbio) in relation to the payment of a special dividend by Symbio on 28 February 2024 (Special Dividend) and the acquisition of all the ordinary shares in Symbio by Aussie Broadband Limited (ABB) on 28 February 2024 (Implementation Date). 2. Details of this scheme are set out in paragraphs 59 to 96 of this Ruling. 3. All legislative references in this Ruling are to the Income Tax Assessment Act 1997, unless otherwise indicated. Who this Ruling applies to 4. This Ruling applies to you if you: 5. Paragraphs 8 to 27 of this Ruling also apply to you if the Special Dividend flows to you indirectly through a partnership or trust. 6. This Ruling does not apply to you if you: Note: Division 230 will not apply to individuals unless they have made an election for it to apply. When this Ruling applies 7. This Ruling applies from 1 July 2023 to 30 June 2024. Special Dividend paid by Symbio Holdings Limited included in the assessable income of Australian-resident shareholders 8. The Special Dividend is a 'dividend' as defined in subsection 6(1) of the ITAA 1936. 9. If you are a resident of Australia and you received the Special Dividend, your assessable income for the income year in which you received the Special Dividend includes 35 cents in respect of each Symbio share (subparagraph 44(1)(a)(i) of the ITAA 1936). 10. Additionally, in the income year in which you received the Special Dividend (subject to you being a 'qualified person' in relation to the Special Dividend), if you are not a partnership or trustee of a trust to whom a franked distribution is made (except a corporate tax entity or a trustee of a trust that is a complying superannuation entity), and if you are not an entity to whom a franked distribution flows indirectly, you will: 11. If you received the Special Dividend as a partnership or as the trustee of a trust (and if you are not a corporate tax entity or a complying superannuation entity), and if you are a qualified person in relation to the Special Dividend, your assessable income includes the franking credit on the Special Dividend (subsection 207-35(1)). 12. If you are a resident of Australia and the Special Dividend flows to you indirectly as a partner in a partnership or as a beneficiary of a trust, you will, in the income year in which the Special Dividend flows indirectly to you: 13. Your entitlement to the franking credit tax offset under Division 207 in relation to the Special Dividend is subject to the refundable tax offset rules in Division 67, provided you are not excluded by the operation of section 67-25. Qualified person 14. Paragraph 207-145(1)(a) refers to Division 1A of former Part IIIAA of the ITAA 1936, which contains the conditions you must satisfy to be a qualified person in relation to a franked distribution you have received. The main way in which you can be a qualified person is by satisfying the holding period rule. 15. Paragraph 207-150(1)(a) applies in a corresponding way to a franked distribution which flows indirectly to you through a partnership or trust. 16. The Special Dividend constitutes a 'related payment' for the purposes of former section 160APHN of the ITAA 1936. This is because the Scheme Consideration paid by ABB for acquiring the Symbio shares is reduced by the amount of the Special Dividend. This reduction has the effect of passing the benefit of the Special Dividend from the shareholders of Symbio to ABB (former subsection 160APHN(2), former paragraphs 160APHN(3)(f), 160APHN(4)(c) and (d) of the ITAA 1936). 17. Therefore, you are taken to have made a related payment in respect of the Special Dividend. 18. You will satisfy the holding period rule in relation to the Special Dividend if you held your Symbio shares (or your interest in Symbio shares held through a partnership or trust, as defined in former subsection 160APHG of the ITAA 1936) for a continuous period of at least 45 days during the secondary qualification period for the Special Dividend (former paragraph 160APHO(1)(b) and former subsection 160APHO(2) of the ITAA 1936). 19. The secondary qualification period begins on the 45th day before, and ends on the 45th day after, the day on which the shares became ex dividend (former section 160APHD of the ITAA 1936). 20. Former subsection 160APHE(1) of the ITAA 1936 states that a share in respect of which a dividend is to be paid, or an interest in such a share, becomes ex dividend on the day after the last day on which the acquisition by a person of the share will entitle the person to receive the dividend. 21. In relation to the Special Dividend, the Symbio shares (or an interest in Symbio shares) became ex dividend on 20 February 2024. 22. Therefore, you will satisfy the holding period rule in relation to the Special Dividend if, during the period from 6 January 2024 to 20 February 2024 (inclusive), you held each of your Symbio shares or your interest in Symbio shares for a continuous period of at least 45 days (not counting the day on which you acquired the Symbio share or interest, or the day on which you disposed of the Symbio share or interest, and not counting the days, if any, on which you had 'materially diminished risks of loss or opportunities for gain' (as defined in former section 160APHM of the ITAA 1936) in respect of the Symbio share or interest). 23. You had materially diminished risks of loss or opportunities for gain on and after 21 February 2024 (the Scheme Record Date), when you became committed to disposing of your shares in Symbio in exchange for the Scheme Consideration. Therefore, the secondary qualification period for the Special Dividend ended on 20 February 2024. Exempting entity 24. As Symbio was not an exempting entity (section 208-20) or a former exempting entity (section 208-50) at the time when it paid the Special Dividend to you, section 208-195 will not apply to prevent the inclusion in your assessable income of the amount of the franking credit on the Special Dividend you received, nor to deny the franking credit tax offset to which you are otherwise entitled, under Division 207. Integrity rules in relation to franking credits 25. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits you received in relation to the Special Dividend. This is because it cannot be concluded that Symbio or the shareholders of Symbio entered into or carried out the scheme for a more than incidental purpose of enabling the shareholders of Symbio to obtain an imputation benefit, and accordingly the purpose requirement in paragraph 177EA(3)(e) of the ITAA 1936 is not satisfied. 26. As there is no streaming of distributions, the Commissioner will not make a determination under subsection 204-30(3) to deny the whole, or any part, of the imputation benefits you received in relation to the Special Dividend. 27. Section 207-145 will not apply to the whole, or any part, of the Special Dividend. Special Dividend paid by Symbio Holdings Limited to non-resident shareholders if the Special Dividend is not attributable to a permanent establishment in Australia 28. If you are a non-resident and you received the Special Dividend, and the Special Dividend is not attributable to a permanent establishment in Australia, no part of the Special Dividend will be included in your assessable income. Specifically: Capital gains tax consequences CGT event A1 happened on the disposal of shares in Symbio Holdings Limited 29. CGT event A1 happened when you disposed of your Symbio shares to ABB (section 104-10). 30. The time of CGT event A1 was the Implementation Date of 28 February 2024 (paragraph 104-10(3)(b)). 31. If you received the Default Consideration, the capital proceeds for disposing of each of your Symbio shares consisted of the sum of $1.91 of money and the market value of 0.192 of an ABB share (Scheme Consideration) (subsection 116-20(1)). The market value of ABB shares is worked out as at the time of CGT event A1. 32. If you received the Maximum Cash Consideration, the capital proceeds for disposing of each of your Symbio shares are $2.3174 of money and the market value of 0.0881 of an ABB share (Scheme Consideration) (paragraph 116-20(1)(a)). The market value of ABB shares is worked out as at the time of CGT event A1. 33. If you received the Maximum Scrip Consideration, the capital proceeds for disposing of each of your Symbio shares are the market value of 0.6792 of an ABB share (Scheme Consideration) (paragraph 116-20(1)(b)). The market value of ABB shares is worked out as at the time of CGT event A1. 34. The Commissioner accepts that the market value of one ABB share as at the time of CGT event A1 was $4.54. 35. The capital proceeds do not include the Special Dividend as it was not paid in respect of CGT event A1 happening to your Symbio shares. 36. You made a capital gain if the capital proceeds from disposing of each of your Symbio shares exceed its cost base at the time of CGT event A1 (subsection 104-10(4)). The capital gain is the amount of the excess. 37. You made a capital loss if the capital proceeds from disposing of each of your Symbio shares are less than its reduced cost base at the time of CGT event A1 (subsection 104-10(4)). The capital loss is the amount of the difference. 38. If you made a capital gain on disposing of your Symbio shares, you can treat the capital gain as a 'discount capital gain' provided that: Foreign-resident shareholders generally disregard a capital gain or capital loss 39. You must disregard a capital gain or capital loss you made from CGT event A1 happening when you disposed of your Symbio shares to ABB (section 855-10) if: 40. Your Symbio shares were taxable Australian property if they were either: Scrip for scrip roll-over is available if you received either the Default Consideration, the Maximum Scrip Consideration or the Maximum Cash Consideration for your shares in Symbio Holdings Limited 41. Subject to the qualifications in paragraphs 42 and 43 of this Ruling, if you make a capital gain from the disposal of your Symbio shares and you received either the Default Consideration, the Maximum Scrip Consideration or the Maximum Cash Consideration, you may choose to obtain scrip for scrip roll-over for the capital gain (sections 124-780, 124-785 and 124-790). 42. If any capital gain you might make from a replacement ABB share would be disregarded, otherwise than because of a roll-over, you cannot choose scrip for scrip roll-over (paragraph 124-795(2)(a)). 43. If you were a foreign resident just before the Implementation Date, you cannot choose scrip for scrip roll-over unless you received ABB shares and they were taxable Australian property (as defined in section 855-15) just after the Implementation Date (subsection 124-795(1)). Consequences if you choose scrip for scrip roll-over for your shares in Symbio Holdings Limited Capital gain is partly disregarded if you received the Default Consideration or the Maximum Cash Consideration 44. If you choose scrip for scrip roll-over and you received either the Default Consideration or the Maximum Cash Consideration, the part of the capital gain that is attributable to the receipt of ABB shares is disregarded (subsections 124-785(1) and 124-790(1)). 45. Any part of the capital gain that is attributable to the receipt of money is not disregarded because it is 'ineligible proceeds' for which roll-over is not available (subsection 124-790(1)). Capital gain is fully disregarded if you received the Maximum Scrip Consideration 46. If you choose scrip for scrip roll-over and you received the Maximum Scrip Consideration, your entire capital gain is disregarded (subsection 124-785(1)). Acquisition date of shares in Aussie Broadband Limited for discount capital gain purposes if you received the Default Consideration, the Maximum Scrip Consideration or the Maximum Cash Consideration 47. For the purposes of determining your eligibility to make a discount capital gain from a subsequent CGT event happening to the ABB shares you acquired if you received the Default Consideration, the Maximum Scrip Consideration or the Maximum Cash Consideration for which you choose scrip for scrip roll-over, the ABB shares you acquired in exchange for your Symbio shares are taken to have been acquired on the date you acquired, for CGT purposes, the corresponding Symbio shares (table item 2 of subsection 115-30(1)). Cost base and reduced cost base of shares in Aussie Broadband Limited if you received the Default Consideration or the Maximum Cash Consideration 48. If you choose scrip for scrip roll-over and you received either the Default Consideration or the Maximum Cash Consideration, the first element of the cost base and reduced cost base of each replacement ABB share you received is worked out by reasonably attributing to it the cost base and reduced cost base (respectively) of the Symbio shares for which it was exchanged and for which the roll-over was obtained (subsections 124-785(2) and (4)). 49. You will have to reduce the cost base and reduced cost base of your Symbio shares by so much of it that is attributable to the money component of the capital proceeds you received (subsection 124-785(3)). 50. You can calculate the first element of the cost base and reduced cost base of each replacement ABB share by dividing the total cost bases of your Symbio shares (as reduced under subsection 124-785(3) for the money component) by the number of replacement ABB shares you received. Cost base and reduced cost base of shares in Aussie Broadband Limited if you received the Maximum Scrip Consideration 51. If you choose scrip for scrip roll-over and you received the Maximum Scrip Consideration, the first element of the cost base and reduced cost base of each replacement ABB share you received is worked out by reasonably attributing to it the cost base and reduced cost base (respectively) of the Symbio shares for which it was exchanged and for which the roll-over was obtained (subsections 124-785(2) and (4)). 52. The Commissioner accepts a reasonable method of attribution would be to calculate the first element of the cost base and reduced cost base of each replacement ABB share by dividing the total cost bases of your Symbio shares by the number of replacement ABB shares you received. Consequences if you do not choose, or cannot choose, scrip for scrip roll-over for your shares in Symbio Holdings Limited Capital gain is not disregarded 53. If you do not choose, or cannot choose, scrip for scrip roll-over, you must take into account any capital gain or capital loss from CGT event A1 happening on the disposal of your Symbio shares in working out your net capital gain or net capital loss for the income year in which CGT event A1 happened (sections 102-5 and 102-10). 54. If you make a capital gain where you do not choose, or cannot choose, scrip for scrip roll-over, you can treat the capital gain as a discount capital gain provided that the conditions of Subdivision 115-A are met (see paragraph 38 of this Ruling). In particular, you must have acquired your Symbio shares that were disposed of under the scheme of arrangement at least 12 months before the Implementation Date (excluding the date of acquisition and the Implementation Date). Cost base and reduced cost base of shares in Aussie Broadband Limited 55. If you do not choose, or cannot choose, scrip for scrip roll-over, and you received either the Default Consideration or the Maximum Cash Consideration, the first element of the cost base and reduced cost base of a replacement ABB share that you received is equal to the market value of the Symbio shares you gave in respect of acquiring the ABB share (subsections 110-25(2) and 110-55(2)), reduced by the proportion of the market value of the Symbio shares that is reasonably attributable to the money component of the capital proceeds you received (subsection 112-30(1)). 56. If you do not choose, or cannot choose, scrip for scrip roll-over, and you received the Maximum Scrip Consideration, the first element of the cost base and reduced cost base of a replacement ABB share that you received is equal to the market value of the Symbio shares you gave in respect of acquiring the ABB share (subsections 110-25(2) and 110-55(2)) 57. The market value of the Symbio shares you gave is to be worked out as at the time when you acquired the ABB shares. Acquisition date of shares in Aussie Broadband Limited 58. If you do not choose, or cannot choose, scrip for scrip roll-over, the acquisition date of the ABB shares is the date on which those shares were issued to you, being the Implementation Date of 28 February 2024 (table item 2 of section 109-10). 59. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. Symbio Holdings Limited 60. Symbio is a company that was incorporated in Australia on 8 March 2006. 61. Symbio is the head company of an income tax consolidated group under Part 3-90. 62. Symbio was listed on the Australian Securities Exchange (ASX) on 18 May 2006. The ordinary shares in Symbio traded under the ASX code 'SYM'. 63. The business of Symbio consists of telecommunications services through cloud and software technology. 64. Symbio has one class of shares on issue. On the Implementation Date, there were 86,113,190 Symbio ordinary shares on issue. 65. Just before the Scheme Implementation Agreement was entered into, and just before the Implementation Date, Symbio had more than 300 shareholders. 66. For the purposes of section 855-30, the sum of the market values of the assets of Symbio that were taxable Australian real property (as defined in section 855-20) on the Implementation Date did not exceed the sum of the market values of the assets of Symbio that were not taxable Australian real property on the Implementation Date. Special Dividend 67. On 5 February 2024, the directors of Symbio determined the Special Dividend to be paid to shareholders who held Symbio shares on 19 February 2024 (Special Dividend Record Date). 68. The Special Dividend is a 'frankable distribution' as defined in section 202-40. 69. The Special Dividend consisted of a fully franked amount of 35 cents in respect of each Symbio share. 70. The Special Dividend was paid on 28 February 2024. Aussie Broadband Limited 71. ABB is a company incorporated in Australia. 72. ABB was listed on the ASX on 15 October 2020. The ordinary shares in ABB trade under the ASX code 'ABB'. 73. ABB has more than 300 shareholders. 74. The majority of the shares in ABB are owned by Australian residents.

Class of entities or scheme: 75. On 1 November 2023, Symbio and ABB announced that they had entered into a Scheme Implementation Agreement. Under the Agreement, Symbio agreed to propose that Symbio and the shareholders of Symbio enter into a scheme of arrangement under Part 5.1 of the Corporations Act 2001 pursuant to which ABB would acquire all of the ordinary shares in Symbio. 76. On 7 February 2024, a resolution in favour of the scheme of arrangement was passed by the shareholders of Symbio as required by subparagraph 411(4)(a)(ii) of the Corporations Act 2001. 77. The scheme of arrangement was approved by the Federal Court of Australia under paragraph 411(4)(b) of the Corporations Act 2001 on 16 February 2024. 78. ABB acquired all of the shares in Symbio on the Implementation Date (28 February 2024). 79. Under the scheme of arrangement, the shareholders of Symbio as at the Scheme Record Date (21 February 2024) received the Scheme Consideration for each share in Symbio on the Implementation Date. 80. There were 3 types of Scheme Consideration available, which could be chosen by each Symbio shareholder (with some exceptions): 81. Symbio shareholders had to choose the type of Scheme Consideration they wanted to receive by 31 January 2024. 82. Symbio shareholders who did not make a valid choice received the Default Consideration. 83. Symbio shareholders whose address in the Symbio share register as at the Scheme Record Date was a place outside Australia or New Zealand, and Symbio shareholders with a small shareholding, automatically received the Maximum Cash Consideration. 84. As the number of Symbio shareholders who chose to receive the Maximum Cash Consideration exceeded certain limits, there was a scaleback of the Maximum Cash Consideration. This meant that Symbio shareholders who chose to receive the Maximum Cash Consideration received $2.3174 and 0.0881 of a share in ABB for each share in Symbio. 85. The shares in Symbio were suspended from trading on the ASX from the close of trading on 19 February 2024. 86. On 29 February 2024, Symbio was removed from the official list of the ASX. | Other information: 87. The Special Dividend was paid at the discretion of the directors of Symbio. Neither ABB nor any of its associates had any influence or control over the payment of the Special Dividend. 88. Neither ABB nor any of its associates funded, or were in any way connected to the funding of, the Special Dividend. 89. The following facts are relevant for the purposes of section 207-159: 90. There was no 'significant stakeholder' or 'common stakeholder' in Symbio within the meaning of those terms in section 124-783. 91. Paragraph 124-780(3)(f) is satisfied in respect of the disposal of Symbio shares to ABB. 92. A Symbio shareholder, Symbio and ABB were not all members of the same 'linked group' (within the meaning of that term in section 170-260) just before the Scheme Implementation Agreement was entered into. 93. Symbio was not an exempting entity (section 208-20) or a former exempting entity (section 208-50) at the time when it paid the Special Dividend. 94. ABB did not make a choice under subsection 124-795(4) that Symbio shareholders could not obtain the roll-over in Subdivision 124-M for CGT event A1 happening in relation to the exchange of Symbio shares. 95. Subsections 124-810(3) and (5) did not apply to Symbio just before the Scheme Implementation Agreement was entered into. 96. The following table is a summary of the key dates for the Special Dividend and the scheme of arrangement. Commissioner of Taxation 27 March 2024 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Ruling: 1. This Ruling sets out the income tax consequences for the holders of ordinary shares in Symbio Holdings Limited (Symbio) in relation to the payment of a special dividend by Symbio on 28 February 2024 (Special Dividend) and the acquisition of all the ordinary shares in Symbio by Aussie Broadband Limited (ABB) on 28 February 2024 (Implementation Date). 2. Details of this scheme are set out in paragraphs 59 to 96 of this Ruling. 3. All legislative references in this Ruling are to the Income Tax Assessment Act 1997, unless otherwise indicated. | Who this Ruling applies to: 4. This Ruling applies to you if you: 5. Paragraphs 8 to 27 of this Ruling also apply to you if the Special Dividend flows to you indirectly through a partnership or trust. 6. This Ruling does not apply to you if you: Note: Division 230 will not apply to individuals unless they have made an election for it to apply. | When this Ruling applies: 7. This Ruling applies from 1 July 2023 to 30 June 2024. | Special Dividend paid by Symbio Holdings Limited included in the assessable income of Australian-resident shareholders: 8. The Special Dividend is a 'dividend' as defined in subsection 6(1) of the ITAA 1936. 9. If you are a resident of Australia and you received the Special Dividend, your assessable income for the income year in which you received the Special Dividend includes 35 cents in respect of each Symbio share (subparagraph 44(1)(a)(i) of the ITAA 1936). 10. Additionally, in the income year in which you received the Special Dividend (subject to you being a 'qualified person' in relation to the Special Dividend), if you are not a partnership or trustee of a trust to whom a franked distribution is made (except a corporate tax entity or a trustee of a trust that is a complying superannuation entity), and if you are not an entity to whom a franked distribution flows indirectly, you will: 11. If you received the Special Dividend as a partnership or as the trustee of a trust (and if you are not a corporate tax entity or a complying superannuation entity), and if you are a qualified person in relation to the Special Dividend, your assessable income includes the franking credit on the Special Dividend (subsection 207-35(1)). 12. If you are a resident of Australia and the Special Dividend flows to you indirectly as a partner in a partnership or as a beneficiary of a trust, you will, in the income year in which the Special Dividend flows indirectly to you: 13. Your entitlement to the franking credit tax offset under Division 207 in relation to the Special Dividend is subject to the refundable tax offset rules in Division 67, provided you are not excluded by the operation of section 67-25. | Qualified person: 14. Paragraph 207-145(1)(a) refers to Division 1A of former Part IIIAA of the ITAA 1936, which contains the conditions you must satisfy to be a qualified person in relation to a franked distribution you have received. The main way in which you can be a qualified person is by satisfying the holding period rule. 15. Paragraph 207-150(1)(a) applies in a corresponding way to a franked distribution which flows indirectly to you through a partnership or trust. 16. The Special Dividend constitutes a 'related payment' for the purposes of former section 160APHN of the ITAA 1936. This is because the Scheme Consideration paid by ABB for acquiring the Symbio shares is reduced by the amount of the Special Dividend. This reduction has the effect of passing the benefit of the Special Dividend from the shareholders of Symbio to ABB (former subsection 160APHN(2), former paragraphs 160APHN(3)(f), 160APHN(4)(c) and (d) of the ITAA 1936). 17. Therefore, you are taken to have made a related payment in respect of the Special Dividend. 18. You will satisfy the holding period rule in relation to the Special Dividend if you held your Symbio shares (or your interest in Symbio shares held through a partnership or trust, as defined in former subsection 160APHG of the ITAA 1936) for a continuous period of at least 45 days during the secondary qualification period for the Special Dividend (former paragraph 160APHO(1)(b) and former subsection 160APHO(2) of the ITAA 1936). 19. The secondary qualification period begins on the 45th day before, and ends on the 45th day after, the day on which the shares became ex dividend (former section 160APHD of the ITAA 1936). 20. Former subsection 160APHE(1) of the ITAA 1936 states that a share in respect of which a dividend is to be paid, or an interest in such a share, becomes ex dividend on the day after the last day on which the acquisition by a person of the share will entitle the person to receive the dividend. 21. In relation to the Special Dividend, the Symbio shares (or an interest in Symbio shares) became ex dividend on 20 February 2024. 22. Therefore, you will satisfy the holding period rule in relation to the Special Dividend if, during the period from 6 January 2024 to 20 February 2024 (inclusive), you held each of your Symbio shares or your interest in Symbio shares for a continuous period of at least 45 days (not counting the day on which you acquired the Symbio share or interest, or the day on which you disposed of the Symbio share or interest, and not counting the days, if any, on which you had 'materially diminished risks of loss or opportunities for gain' (as defined in former section 160APHM of the ITAA 1936) in respect of the Symbio share or interest). 23. You had materially diminished risks of loss or opportunities for gain on and after 21 February 2024 (the Scheme Record Date), when you became committed to disposing of your shares in Symbio in exchange for the Scheme Consideration. Therefore, the secondary qualification period for the Special Dividend ended on 20 February 2024. | Exempting entity: 24. As Symbio was not an exempting entity (section 208-20) or a former exempting entity (section 208-50) at the time when it paid the Special Dividend to you, section 208-195 will not apply to prevent the inclusion in your assessable income of the amount of the franking credit on the Special Dividend you received, nor to deny the franking credit tax offset to which you are otherwise entitled, under Division 207. | Integrity rules in relation to franking credits: 25. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits you received in relation to the Special Dividend. This is because it cannot be concluded that Symbio or the shareholders of Symbio entered into or carried out the scheme for a more than incidental purpose of enabling the shareholders of Symbio to obtain an imputation benefit, and accordingly the purpose requirement in paragraph 177EA(3)(e) of the ITAA 1936 is not satisfied. 26. As there is no streaming of distributions, the Commissioner will not make a determination under subsection 204-30(3) to deny the whole, or any part, of the imputation benefits you received in relation to the Special Dividend. 27. Section 207-145 will not apply to the whole, or any part, of the Special Dividend. | Special Dividend paid by Symbio Holdings Limited to non-resident shareholders if the Special Dividend is not attributable to a permanent establishment in Australia: 28. If you are a non-resident and you received the Special Dividend, and the Special Dividend is not attributable to a permanent establishment in Australia, no part of the Special Dividend will be included in your assessable income. Specifically: | CGT event A1 happened on the disposal of shares in Symbio Holdings Limited: 29. CGT event A1 happened when you disposed of your Symbio shares to ABB (section 104-10). 30. The time of CGT event A1 was the Implementation Date of 28 February 2024 (paragraph 104-10(3)(b)). 31. If you received the Default Consideration, the capital proceeds for disposing of each of your Symbio shares consisted of the sum of $1.91 of money and the market value of 0.192 of an ABB share (Scheme Consideration) (subsection 116-20(1)). The market value of ABB shares is worked out as at the time of CGT event A1. 32. If you received the Maximum Cash Consideration, the capital proceeds for disposing of each of your Symbio shares are $2.3174 of money and the market value of 0.0881 of an ABB share (Scheme Consideration) (paragraph 116-20(1)(a)). The market value of ABB shares is worked out as at the time of CGT event A1. 33. If you received the Maximum Scrip Consideration, the capital proceeds for disposing of each of your Symbio shares are the market value of 0.6792 of an ABB share (Scheme Consideration) (paragraph 116-20(1)(b)). The market value of ABB shares is worked out as at the time of CGT event A1. 34. The Commissioner accepts that the market value of one ABB share as at the time of CGT event A1 was $4.54. 35. The capital proceeds do not include the Special Dividend as it was not paid in respect of CGT event A1 happening to your Symbio shares. 36. You made a capital gain if the capital proceeds from disposing of each of your Symbio shares exceed its cost base at the time of CGT event A1 (subsection 104-10(4)). The capital gain is the amount of the excess. 37. You made a capital loss if the capital proceeds from disposing of each of your Symbio shares are less than its reduced cost base at the time of CGT event A1 (subsection 104-10(4)). The capital loss is the amount of the difference. 38. If you made a capital gain on disposing of your Symbio shares, you can treat the capital gain as a 'discount capital gain' provided that: | Foreign-resident shareholders generally disregard a capital gain or capital loss: 39. You must disregard a capital gain or capital loss you made from CGT event A1 happening when you disposed of your Symbio shares to ABB (section 855-10) if: 40. Your Symbio shares were taxable Australian property if they were either: | Scrip for scrip roll-over is available if you received either the Default Consideration, the Maximum Scrip Consideration or the Maximum Cash Consideration for your shares in Symbio Holdings Limited: 41. Subject to the qualifications in paragraphs 42 and 43 of this Ruling, if you make a capital gain from the disposal of your Symbio shares and you received either the Default Consideration, the Maximum Scrip Consideration or the Maximum Cash Consideration, you may choose to obtain scrip for scrip roll-over for the capital gain (sections 124-780, 124-785 and 124-790). 42. If any capital gain you might make from a replacement ABB share would be disregarded, otherwise than because of a roll-over, you cannot choose scrip for scrip roll-over (paragraph 124-795(2)(a)). 43. If you were a foreign resident just before the Implementation Date, you cannot choose scrip for scrip roll-over unless you received ABB shares and they were taxable Australian property (as defined in section 855-15) just after the Implementation Date (subsection 124-795(1)). | Capital gain is partly disregarded if you received the Default Consideration or the Maximum Cash Consideration: 44. If you choose scrip for scrip roll-over and you received either the Default Consideration or the Maximum Cash Consideration, the part of the capital gain that is attributable to the receipt of ABB shares is disregarded (subsections 124-785(1) and 124-790(1)). 45. Any part of the capital gain that is attributable to the receipt of money is not disregarded because it is 'ineligible proceeds' for which roll-over is not available (subsection 124-790(1)). | Capital gain is fully disregarded if you received the Maximum Scrip Consideration: 46. If you choose scrip for scrip roll-over and you received the Maximum Scrip Consideration, your entire capital gain is disregarded (subsection 124-785(1)). | Acquisition date of shares in Aussie Broadband Limited for discount capital gain purposes if you received the Default Consideration, the Maximum Scrip Consideration or the Maximum Cash Consideration: 47. For the purposes of determining your eligibility to make a discount capital gain from a subsequent CGT event happening to the ABB shares you acquired if you received the Default Consideration, the Maximum Scrip Consideration or the Maximum Cash Consideration for which you choose scrip for scrip roll-over, the ABB shares you acquired in exchange for your Symbio shares are taken to have been acquired on the date you acquired, for CGT purposes, the corresponding Symbio shares (table item 2 of subsection 115-30(1)). | Cost base and reduced cost base of shares in Aussie Broadband Limited if you received the Default Consideration or the Maximum Cash Consideration: 48. If you choose scrip for scrip roll-over and you received either the Default Consideration or the Maximum Cash Consideration, the first element of the cost base and reduced cost base of each replacement ABB share you received is worked out by reasonably attributing to it the cost base and reduced cost base (respectively) of the Symbio shares for which it was exchanged and for which the roll-over was obtained (subsections 124-785(2) and (4)). 49. You will have to reduce the cost base and reduced cost base of your Symbio shares by so much of it that is attributable to the money component of the capital proceeds you received (subsection 124-785(3)). 50. You can calculate the first element of the cost base and reduced cost base of each replacement ABB share by dividing the total cost bases of your Symbio shares (as reduced under subsection 124-785(3) for the money component) by the number of replacement ABB shares you received. | Cost base and reduced cost base of shares in Aussie Broadband Limited if you received the Maximum Scrip Consideration: 51. If you choose scrip for scrip roll-over and you received the Maximum Scrip Consideration, the first element of the cost base and reduced cost base of each replacement ABB share you received is worked out by reasonably attributing to it the cost base and reduced cost base (respectively) of the Symbio shares for which it was exchanged and for which the roll-over was obtained (subsections 124-785(2) and (4)). 52. The Commissioner accepts a reasonable method of attribution would be to calculate the first element of the cost base and reduced cost base of each replacement ABB share by dividing the total cost bases of your Symbio shares by the number of replacement ABB shares you received. | Capital gain is not disregarded: 53. If you do not choose, or cannot choose, scrip for scrip roll-over, you must take into account any capital gain or capital loss from CGT event A1 happening on the disposal of your Symbio shares in working out your net capital gain or net capital loss for the income year in which CGT event A1 happened (sections 102-5 and 102-10). 54. If you make a capital gain where you do not choose, or cannot choose, scrip for scrip roll-over, you can treat the capital gain as a discount capital gain provided that the conditions of Subdivision 115-A are met (see paragraph 38 of this Ruling). In particular, you must have acquired your Symbio shares that were disposed of under the scheme of arrangement at least 12 months before the Implementation Date (excluding the date of acquisition and the Implementation Date). | Cost base and reduced cost base of shares in Aussie Broadband Limited: 55. If you do not choose, or cannot choose, scrip for scrip roll-over, and you received either the Default Consideration or the Maximum Cash Consideration, the first element of the cost base and reduced cost base of a replacement ABB share that you received is equal to the market value of the Symbio shares you gave in respect of acquiring the ABB share (subsections 110-25(2) and 110-55(2)), reduced by the proportion of the market value of the Symbio shares that is reasonably attributable to the money component of the capital proceeds you received (subsection 112-30(1)). 56. If you do not choose, or cannot choose, scrip for scrip roll-over, and you received the Maximum Scrip Consideration, the first element of the cost base and reduced cost base of a replacement ABB share that you received is equal to the market value of the Symbio shares you gave in respect of acquiring the ABB share (subsections 110-25(2) and 110-55(2)) 57. The market value of the Symbio shares you gave is to be worked out as at the time when you acquired the ABB shares. | Acquisition date of shares in Aussie Broadband Limited: 58. If you do not choose, or cannot choose, scrip for scrip roll-over, the acquisition date of the ABB shares is the date on which those shares were issued to you, being the Implementation Date of 28 February 2024 (table item 2 of section 109-10). 59. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Symbio Holdings Limited: 60. Symbio is a company that was incorporated in Australia on 8 March 2006. 61. Symbio is the head company of an income tax consolidated group under Part 3-90. 62. Symbio was listed on the Australian Securities Exchange (ASX) on 18 May 2006. The ordinary shares in Symbio traded under the ASX code 'SYM'. 63. The business of Symbio consists of telecommunications services through cloud and software technology. 64. Symbio has one class of shares on issue. On the Implementation Date, there were 86,113,190 Symbio ordinary shares on issue. 65. Just before the Scheme Implementation Agreement was entered into, and just before the Implementation Date, Symbio had more than 300 shareholders. 66. For the purposes of section 855-30, the sum of the market values of the assets of Symbio that were taxable Australian real property (as defined in section 855-20) on the Implementation Date did not exceed the sum of the market values of the assets of Symbio that were not taxable Australian real property on the Implementation Date. | Special Dividend: 67. On 5 February 2024, the directors of Symbio determined the Special Dividend to be paid to shareholders who held Symbio shares on 19 February 2024 (Special Dividend Record Date). 68. The Special Dividend is a 'frankable distribution' as defined in section 202-40. 69. The Special Dividend consisted of a fully franked amount of 35 cents in respect of each Symbio share. 70. The Special Dividend was paid on 28 February 2024. | Aussie Broadband Limited: 71. ABB is a company incorporated in Australia. 72. ABB was listed on the ASX on 15 October 2020. The ordinary shares in ABB trade under the ASX code 'ABB'. 73. ABB has more than 300 shareholders. 74. The majority of the shares in ABB are owned by Australian residents. | Scheme of arrangement  acquisition of Symbio Holdings Limited shares by Aussie Broadband Limited: 75. On 1 November 2023, Symbio and ABB announced that they had entered into a Scheme Implementation Agreement. Under the Agreement, Symbio agreed to propose that Symbio and the shareholders of Symbio enter into a scheme of arrangement under Part 5.1 of the Corporations Act 2001 pursuant to which ABB would acquire all of the ordinary shares in Symbio. 76. On 7 February 2024, a resolution in favour of the scheme of arrangement was passed by the shareholders of Symbio as required by subparagraph 411(4)(a)(ii) of the Corporations Act 2001. 77. The scheme of arrangement was approved by the Federal Court of Australia under paragraph 411(4)(b) of the Corporations Act 2001 on 16 February 2024. 78. ABB acquired all of the shares in Symbio on the Implementation Date (28 February 2024). 79. Under the scheme of arrangement, the shareholders of Symbio as at the Scheme Record Date (21 February 2024) received the Scheme Consideration for each share in Symbio on the Implementation Date. 80. There were 3 types of Scheme Consideration available, which could be chosen by each Symbio shareholder (with some exceptions): 81. Symbio shareholders had to choose the type of Scheme Consideration they wanted to receive by 31 January 2024. 82. Symbio shareholders who did not make a valid choice received the Default Consideration. 83. Symbio shareholders whose address in the Symbio share register as at the Scheme Record Date was a place outside Australia or New Zealand, and Symbio shareholders with a small shareholding, automatically received the Maximum Cash Consideration. 84. As the number of Symbio shareholders who chose to receive the Maximum Cash Consideration exceeded certain limits, there was a scaleback of the Maximum Cash Consideration. This meant that Symbio shareholders who chose to receive the Maximum Cash Consideration received $2.3174 and 0.0881 of a share in ABB for each share in Symbio. 85. The shares in Symbio were suspended from trading on the ASX from the close of trading on 19 February 2024. 86. On 29 February 2024, Symbio was removed from the official list of the ASX. | Other information: 87. The Special Dividend was paid at the discretion of the directors of Symbio. Neither ABB nor any of its associates had any influence or control over the payment of the Special Dividend. 88. Neither ABB nor any of its associates funded, or were in any way connected to the funding of, the Special Dividend. 89. The following facts are relevant for the purposes of section 207-159: 90. There was no 'significant stakeholder' or 'common stakeholder' in Symbio within the meaning of those terms in section 124-783. 91. Paragraph 124-780(3)(f) is satisfied in respect of the disposal of Symbio shares to ABB. 92. A Symbio shareholder, Symbio and ABB were not all members of the same 'linked group' (within the meaning of that term in section 170-260) just before the Scheme Implementation Agreement was entered into. 93. Symbio was not an exempting entity (section 208-20) or a former exempting entity (section 208-50) at the time when it paid the Special Dividend. 94. ABB did not make a choice under subsection 124-795(4) that Symbio shareholders could not obtain the roll-over in Subdivision 124-M for CGT event A1 happening in relation to the exchange of Symbio shares. 95. Subsections 124-810(3) and (5) did not apply to Symbio just before the Scheme Implementation Agreement was entered into. 96. The following table is a summary of the key dates for the Special Dividend and the scheme of arrangement. Commissioner of Taxation 27 March 2024 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).




What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling. | Scheme Implementation Agreement executed | Second court hearing to approve the scheme | Effective date of the scheme | Implementation Date and Special Dividend payment date


Related rulings: TD 2002/4 TD 2002/10 TR 2006/10 TR 2010/4
Legislative references: ITAA 1936 6(1) ITAA 1936 44(1)(a)(i) ITAA 1936 Pt III Div 5 ITAA 1936 Pt III Div6 ITAA 1936 128B(3)(ga)(i) ITAA 1936 128D ITAA 1936 177EA(3)(e) ITAA 1936 177EA(5)(b) ITAA 1936 former Pt IIIAA Div 1A ITAA 1936 former 160APHD ITAA 1936 former 160APHE(1) ITAA 1936 former 160APHG ITAA 1936 former 160APHM ITAA 1936 former 160APHN ITAA 1936 former 160APHN(2) ITAA 1936 former 160APHN(3)(f) ITAA 1936 former 160APHN(4)(c) ITAA 1936 former 160APHN(4)(d) ITAA 1936 former 160APHO(1)(b) ITAA 1936 former 160APHO(2) ITAA 1936 former 160APHU(1) ITAA 1997 Div 67 ITAA 1997 67-25 ITAA 1997 83A-10 ITAA 1997 102-5 ITAA 1997 102-10 ITAA 1997 104-10 ITAA 1997 104-10(3)(b) ITAA 1997 104-10(4) ITAA 1997 104-165(3) ITAA 1997 109-10 ITAA 1997 110-25(2) ITAA 1997 110-55(2) ITAA 1997 112-30(1) ITAA 1997114-1 ITAA 1997 Subdiv 115-A ITAA 1997 115-10 ITAA 1997 115-20(1) ITAA 1997 115-25(1) ITAA 1997 115-30(1) ITAA 1997 116-20(1) ITAA 1997 116-20(1)(a) ITAA 1997 116-20(1)(b) ITAA 1997 Subdiv 124-M ITAA 1997 124-780 ITAA 1997 124-780(3)(f) ITAA 1997 124-783 ITAA 1997 124-785 ITAA 1997 124-785(1) ITAA 1997 124-785(2) ITAA 1997 124-785(3) ITAA 1997 124-785(4) ITAA 1997 124-790 ITAA 1997 124-790(1) ITAA 1997 124-795(1) ITAA 1997 124-795(2)(a) ITAA 1997 124-795(4) ITAA 1997 124-810(3) ITAA 1997 124-810(5) ITAA 1997 170-260 ITAA 1997 202-40 ITAA 1997 204-30(3) ITAA 1997 Div 207 ITAA 1997 207-20 ITAA 1997 207-20(1) ITAA 1997 207-20(2) ITAA 1997 207-35(1) ITAA 1997 207-35(3) ITAA 1997 207-35(4) ITAA 1997 207-37 ITAA 1997 207-45 ITAA 1997 207-70 ITAA 1997 207-145 ITAA 1997 207-145(1)(a) ITAA 1997 207-150(1)(a) ITAA 1997 207-159 ITAA 1997 208-20 ITAA 1997 208-50 ITAA 1997 208-195 ITAA 1997 Div 230 ITAA 1997 Pt 3-90 ITAA 1997 Subdiv 842-I ITAA 1997 855-10 ITAA 1997 855-15 ITAA 1997 855-20 ITAA 1997 855-30 ITAA 1997 977-50 ITAA 1997 995-1(1) Corporations Act 2001 Pt 5.1 Corporations Act 2001 411(4)(a)(ii) Corporations Act 2001 411(4)(b)