Class Ruling CR 2019/75

What this ruling is about: 1. This Ruling sets out the tax consequences for holders of GARDA Capital Group (GCM) Stapled Securities (consisting of units in GARDA Capital Trust (GCT) and shares in GARDA Capital Limited (GCL)) in relation to the acquisition of those securities by GARDA Diversified Property Fund (GDF) and GARDA Holdings Limited (GHL) respectively. 2. Full details of this scheme are set out in paragraphs 34 to 49 of this Ruling. 3. Legislative references in this Ruling are to provisions of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 (as detailed in the table in Appendix 2 of this Ruling). Who this Ruling applies to 4. This Ruling applies to you if you are an Australian resident for income tax purposes and you: 5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 in relation to the scheme outlined in paragraphs 34 to 49 of this Ruling. Note: Division 230 will not apply to individuals, unless they have made an election for it to apply. When this Ruling applies 6. This Ruling applies from 1 July 2019 to 30 June 2020. CGT event A1 happened on the disposal of your GCL shares 7. CGT event A1 happened when you disposed of your GCL shares to GHL under the scheme described in this Ruling (subsection 104-10(1)). 8. You will make a capital gain from CGT event A1 happening if the capital proceeds from the disposal of your GCL share exceed its cost base. You will make a capital loss from CGT event A1 happening if the capital proceeds from the disposal of your GCL share are less than its reduced cost base (subsection 104-10(4)). 9. The capital proceeds from CGT event A1 happening is equal to the market value of the share in GHL received under the scheme (paragraph 116-20(1)(b)). Availability of scrip for scrip rollover for your GCL shares 10. If you make a capital gain from the disposal of your GCL shares, you may choose to obtain scrip for scrip rollover (section 124-780). 11. Scrip for scrip rollover cannot be chosen if any capital gain you might subsequently make from the replacement GHL share can be disregarded, except because of a rollover (paragraph 124-795(2)(a)). Consequences if you choose to apply scrip for scrip rollover for your GCL shares 12. If you choose to apply scrip for scrip rollover you will be able to disregard any capital gain arising from CGT event A1 happening in respect of the exchange of GCL shares for replacement GHL shares (subsection 124-785(1)). 13. You can calculate the first element of the Cost base / reduced cost base of each replacement share in GHL by dividing the aggregate cost bases or reduced cost bases of your respective GCL shares by the number of replacement GHL shares you receive. 14. The date of acquisition of GHL shares if you choose scrip for scrip rollover under Subdivision 124-M will be the date you acquired your original shares in GCL. 15. Subsection 115-50(2) will apply if you dispose of your shares in GHL within 12 months of the acquisition, with the result that any capital gain arising from a CGT event happening in relation to a share in GHL can still be a 'discount capital gain'. Consequences if you do not choose to apply scrip for scrip rollover for your GCL shares 16. Where scrip for scrip rollover is not chosen, or cannot be chosen, you must account for any capital gain or capital loss from CGT event A1 happening on the disposal of your GCL shares in working out the net capital gain or net capital loss for the income year in which CGT event A1 happened (sections 102-5 and 102-10). 17. If you make a capital gain where rollover is not chosen, or cannot be chosen, you can treat the capital gain as a 'discount capital gain' provided that the conditions of Subdivision 115-A are met. GCL shares must have been acquired, or taken to have been acquired, by you at least 12 months before the Implementation Date. 18. Where scrip for scrip rollover is not chosen, or cannot be chosen, the first element of the Cost base / reduced cost base of each replacement GHL share received is equal to the market value of each GCL share given in respect of acquiring each GHL share, worked out as at the time of their acquisition (subsections 110-25(2) and 110-55(2)), being the Implementation Date. 19. The date of acquisition of GHL shares if you do not choose scrip for scrip rollover under Subdivision 124-M is the date you were issued shares in GHL. CGT event A1 happened on the disposal of your GCT units 20. CGT event A1 happened when you disposed of your GCT units to GDF (subsection 104-10(1)). 21. You will make a capital gain from CGT event A1 happening if the capital proceeds from the disposal of your GCT unit exceed its cost base. You will make a capital loss from CGT event A1 happening if the capital proceeds from the disposal of your GCT unit are less than its reduced cost base (subsection 104-10(4)). 22. The capital proceeds from CGT event A1 happening is equal to the market value of the GDF unit received under the scheme (paragraph 116-20(1)(b)). Availability of scrip for scrip rollover for your GCT units 23. If you make a capital gain from the disposal of your GCT units, you may choose to obtain scrip for scrip rollover (section 124-781). 24. Scrip for scrip rollover cannot be chosen if any capital gain you might subsequently make from the replacement GDF unit can be disregarded, except because of a rollover (paragraph 124-795(2)(a)). Consequences if you choose to apply scrip for scrip rollover for your GCT units 25. If you choose to apply scrip for scrip rollover you will be able to disregard any capital gain arising from CGT event A1 happening in respect of the exchange of the GCT units for replacement GDF units (subsection 124-785(1)). 26. You can calculate the first element of the Cost base / reduced cost base of each replacement unit in GDF by dividing the aggregate cost bases or reduced cost bases of your respective GCT units by the number of replacement GDF units you receive. 27. The date of acquisition of GDF units if you choose scrip for scrip rollover under Subdivision 124-M will be the date you acquired your original GCT units. 28. Subsection 115-50(2) will apply if you dispose of your GDF units within 12 months of the acquisition, with the result that any capital gain arising from a CGT event happening in relation to a GDF unit can still be a 'discount capital gain'. Consequences if you do not choose to apply scrip for scrip rollover for your GCT units 29. Where scrip for scrip rollover is not chosen, or cannot be chosen, you must account for any capital gain or capital loss from CGT event A1 happening on the disposal of your GCT units in working out the net capital gain or net capital loss for the income year in which CGT event A1 happened (sections 102-5 and 102-10). 30. If you make a capital gain where rollover is not chosen, or cannot be chosen, you can treat the capital gain as a 'discount capital gain' provided that the conditions of Subdivision 115-A are met. GCT units must have been acquired, or taken to have been acquired, by you at least 12 months before the Implementation Date. 31. Where scrip for scrip rollover is not chosen, or cannot be chosen, the first element of the Cost base / reduced cost base of each replacement GDF unit received is equal to the market value of each GCT unit given in respect of acquiring each GDF unit, worked out as at the time of their acquisition (subsections 110-25(2) and 110-55(2)), being the Implementation Date. 32. The date of acquisition of GDF units if you do not choose scrip for scrip rollover under Subdivision 124-M is the date you were issued units in GDF. Part IVA 33. The Commissioner will not make a determination under section 177F in relation to the scheme. 34. 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. Background GCL 35. GCL is an Australian company that was incorporated after 20 September 1985. 36. GCL is the head entity of a tax consolidated group (the GCL TCG) for the purposes of Part 3-90 which includes GARDA Funds Management Limited (GFML). GCT 37. GCT is an Australian unit trust which was constituted after 20 September 1985. 38. GFML is the responsible entity of GCT. 39. GCT is an attribution managed investment trust (AMIT) which has validly made the deemed managed investment trust (MIT) capital treatment election. GCM 40. The shares in GCL and units in GCT are stapled on a 1:1 basis and have been listed on the Australian Securities Exchange (ASX) since 14 July 2016. GDF 41. GDF is an Australian unit trust that was constituted after 20 September 1985. 42. GDF is an AMIT which validly made the deemed MIT capital treatment election. 43. GDF has been listed on the ASX since 2 July 2015. 44. GCL is the responsible entity for GDF and provides management services to GDF. 45. GDF has more than 300 beneficiaries and the top 20 shareholders own less than 75% of the units on issue in the trust. 46. GDF is a property fund, which owns 17 property assets. 47. Following a recent restructure, the units in GDF and the shares in GHL were stapled (collectively, the GDF Stapled Securities) and are quoted on the ASX. The acquisition 48. The acquisition involved the following steps: Other matters 49. This Ruling is made on the following basis: Commissioner of Taxation 4 December 2019 Availability of scrip for scrip rollover under Subdivision 124-M if capital gain is made 50. One tax consequence that is the subject of this Ruling is the availability of scrip for scrip rollover under Subdivision 124-M. Scrip for scrip rollover enables a shareholder or unitholder to disregard a capital gain from the disposal of a share or a unit if the shareholder or unitholder receives a replacement share or unit in exchange. It also provides special rules for calculating the Cost base / reduced cost base of the replacement share or unit. 51. Subdivision 124-M contains a number of conditions for, and exceptions to, a shareholder being able to choose scrip for scrip rollover. The main requirements that are relevant to the scheme that is the subject of this Ruling are: 52. The scheme that is the subject of this Ruling satisfies the requirements for scrip for scrip rollover under Subdivision 124-M. Part IVA 53. Based upon the specific facts and circumstances of this scheme, the Commissioner will not make a determination under section 177F in relation to the scheme as it does not constitute a scheme to which Part IVA applies. 54. This paragraph sets out the details of the provisions ruled upon or referenced in this Ruling. © 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).

Class of entities or scheme: 34. 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. | GCL: 35. GCL is an Australian company that was incorporated after 20 September 1985. 36. GCL is the head entity of a tax consolidated group (the GCL TCG) for the purposes of Part 3-90 which includes GARDA Funds Management Limited (GFML). | GCT: 37. GCT is an Australian unit trust which was constituted after 20 September 1985. 38. GFML is the responsible entity of GCT. 39. GCT is an attribution managed investment trust (AMIT) which has validly made the deemed managed investment trust (MIT) capital treatment election. | GCM: 40. The shares in GCL and units in GCT are stapled on a 1:1 basis and have been listed on the Australian Securities Exchange (ASX) since 14 July 2016. | GDF: 41. GDF is an Australian unit trust that was constituted after 20 September 1985. 42. GDF is an AMIT which validly made the deemed MIT capital treatment election. 43. GDF has been listed on the ASX since 2 July 2015. 44. GCL is the responsible entity for GDF and provides management services to GDF. 45. GDF has more than 300 beneficiaries and the top 20 shareholders own less than 75% of the units on issue in the trust. 46. GDF is a property fund, which owns 17 property assets. 47. Following a recent restructure, the units in GDF and the shares in GHL were stapled (collectively, the GDF Stapled Securities) and are quoted on the ASX. | The acquisition: 48. The acquisition involved the following steps: | Other matters: 49. This Ruling is made on the following basis: Commissioner of Taxation 4 December 2019

Ruling: 1. This Ruling sets out the tax consequences for holders of GARDA Capital Group (GCM) Stapled Securities (consisting of units in GARDA Capital Trust (GCT) and shares in GARDA Capital Limited (GCL)) in relation to the acquisition of those securities by GARDA Diversified Property Fund (GDF) and GARDA Holdings Limited (GHL) respectively. 2. Full details of this scheme are set out in paragraphs 34 to 49 of this Ruling. 3. Legislative references in this Ruling are to provisions of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 (as detailed in the table in Appendix 2 of this Ruling). | Who this Ruling applies to: 4. This Ruling applies to you if you are an Australian resident for income tax purposes and you: 5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 in relation to the scheme outlined in paragraphs 34 to 49 of this Ruling. Note: Division 230 will not apply to individuals, unless they have made an election for it to apply. | When this Ruling applies: 6. This Ruling applies from 1 July 2019 to 30 June 2020. | CGT event A1 happened on the disposal of your GCL shares: 7. CGT event A1 happened when you disposed of your GCL shares to GHL under the scheme described in this Ruling (subsection 104-10(1)). 8. You will make a capital gain from CGT event A1 happening if the capital proceeds from the disposal of your GCL share exceed its cost base. You will make a capital loss from CGT event A1 happening if the capital proceeds from the disposal of your GCL share are less than its reduced cost base (subsection 104-10(4)). 9. The capital proceeds from CGT event A1 happening is equal to the market value of the share in GHL received under the scheme (paragraph 116-20(1)(b)). | Availability of scrip for scrip rollover for your GCL shares: 10. If you make a capital gain from the disposal of your GCL shares, you may choose to obtain scrip for scrip rollover (section 124-780). 11. Scrip for scrip rollover cannot be chosen if any capital gain you might subsequently make from the replacement GHL share can be disregarded, except because of a rollover (paragraph 124-795(2)(a)). | Consequences if you choose to apply scrip for scrip rollover for your GCL shares: 12. If you choose to apply scrip for scrip rollover you will be able to disregard any capital gain arising from CGT event A1 happening in respect of the exchange of GCL shares for replacement GHL shares (subsection 124-785(1)). 13. You can calculate the first element of the Cost base / reduced cost base of each replacement share in GHL by dividing the aggregate cost bases or reduced cost bases of your respective GCL shares by the number of replacement GHL shares you receive. 14. The date of acquisition of GHL shares if you choose scrip for scrip rollover under Subdivision 124-M will be the date you acquired your original shares in GCL. 15. Subsection 115-50(2) will apply if you dispose of your shares in GHL within 12 months of the acquisition, with the result that any capital gain arising from a CGT event happening in relation to a share in GHL can still be a 'discount capital gain'. | Consequences if you do not choose to apply scrip for scrip rollover for your GCL shares: 16. Where scrip for scrip rollover is not chosen, or cannot be chosen, you must account for any capital gain or capital loss from CGT event A1 happening on the disposal of your GCL shares in working out the net capital gain or net capital loss for the income year in which CGT event A1 happened (sections 102-5 and 102-10). 17. If you make a capital gain where rollover is not chosen, or cannot be chosen, you can treat the capital gain as a 'discount capital gain' provided that the conditions of Subdivision 115-A are met. GCL shares must have been acquired, or taken to have been acquired, by you at least 12 months before the Implementation Date. 18. Where scrip for scrip rollover is not chosen, or cannot be chosen, the first element of the Cost base / reduced cost base of each replacement GHL share received is equal to the market value of each GCL share given in respect of acquiring each GHL share, worked out as at the time of their acquisition (subsections 110-25(2) and 110-55(2)), being the Implementation Date. 19. The date of acquisition of GHL shares if you do not choose scrip for scrip rollover under Subdivision 124-M is the date you were issued shares in GHL. | CGT event A1 happened on the disposal of your GCT units: 20. CGT event A1 happened when you disposed of your GCT units to GDF (subsection 104-10(1)). 21. You will make a capital gain from CGT event A1 happening if the capital proceeds from the disposal of your GCT unit exceed its cost base. You will make a capital loss from CGT event A1 happening if the capital proceeds from the disposal of your GCT unit are less than its reduced cost base (subsection 104-10(4)). 22. The capital proceeds from CGT event A1 happening is equal to the market value of the GDF unit received under the scheme (paragraph 116-20(1)(b)). | Availability of scrip for scrip rollover for your GCT units: 23. If you make a capital gain from the disposal of your GCT units, you may choose to obtain scrip for scrip rollover (section 124-781). 24. Scrip for scrip rollover cannot be chosen if any capital gain you might subsequently make from the replacement GDF unit can be disregarded, except because of a rollover (paragraph 124-795(2)(a)). | Consequences if you choose to apply scrip for scrip rollover for your GCT units: 25. If you choose to apply scrip for scrip rollover you will be able to disregard any capital gain arising from CGT event A1 happening in respect of the exchange of the GCT units for replacement GDF units (subsection 124-785(1)). 26. You can calculate the first element of the Cost base / reduced cost base of each replacement unit in GDF by dividing the aggregate cost bases or reduced cost bases of your respective GCT units by the number of replacement GDF units you receive. 27. The date of acquisition of GDF units if you choose scrip for scrip rollover under Subdivision 124-M will be the date you acquired your original GCT units. 28. Subsection 115-50(2) will apply if you dispose of your GDF units within 12 months of the acquisition, with the result that any capital gain arising from a CGT event happening in relation to a GDF unit can still be a 'discount capital gain'. | Consequences if you do not choose to apply scrip for scrip rollover for your GCT units: 29. Where scrip for scrip rollover is not chosen, or cannot be chosen, you must account for any capital gain or capital loss from CGT event A1 happening on the disposal of your GCT units in working out the net capital gain or net capital loss for the income year in which CGT event A1 happened (sections 102-5 and 102-10). 30. If you make a capital gain where rollover is not chosen, or cannot be chosen, you can treat the capital gain as a 'discount capital gain' provided that the conditions of Subdivision 115-A are met. GCT units must have been acquired, or taken to have been acquired, by you at least 12 months before the Implementation Date. 31. Where scrip for scrip rollover is not chosen, or cannot be chosen, the first element of the Cost base / reduced cost base of each replacement GDF unit received is equal to the market value of each GCT unit given in respect of acquiring each GDF unit, worked out as at the time of their acquisition (subsections 110-25(2) and 110-55(2)), being the Implementation Date. 32. The date of acquisition of GDF units if you do not choose scrip for scrip rollover under Subdivision 124-M is the date you were issued units in GDF. | Part IVA: 33. The Commissioner will not make a determination under section 177F in relation to the scheme. 34. 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. | GCL: 35. GCL is an Australian company that was incorporated after 20 September 1985. 36. GCL is the head entity of a tax consolidated group (the GCL TCG) for the purposes of Part 3-90 which includes GARDA Funds Management Limited (GFML). | GCT: 37. GCT is an Australian unit trust which was constituted after 20 September 1985. 38. GFML is the responsible entity of GCT. 39. GCT is an attribution managed investment trust (AMIT) which has validly made the deemed managed investment trust (MIT) capital treatment election. | GCM: 40. The shares in GCL and units in GCT are stapled on a 1:1 basis and have been listed on the Australian Securities Exchange (ASX) since 14 July 2016. | GDF: 41. GDF is an Australian unit trust that was constituted after 20 September 1985. 42. GDF is an AMIT which validly made the deemed MIT capital treatment election. 43. GDF has been listed on the ASX since 2 July 2015. 44. GCL is the responsible entity for GDF and provides management services to GDF. 45. GDF has more than 300 beneficiaries and the top 20 shareholders own less than 75% of the units on issue in the trust. 46. GDF is a property fund, which owns 17 property assets. 47. Following a recent restructure, the units in GDF and the shares in GHL were stapled (collectively, the GDF Stapled Securities) and are quoted on the ASX. | The acquisition: 48. The acquisition involved the following steps: | Other matters: 49. This Ruling is made on the following basis: Commissioner of Taxation 4 December 2019 | Availability of scrip for scrip rollover under Subdivision 124-M if capital gain is made: 50. One tax consequence that is the subject of this Ruling is the availability of scrip for scrip rollover under Subdivision 124-M. Scrip for scrip rollover enables a shareholder or unitholder to disregard a capital gain from the disposal of a share or a unit if the shareholder or unitholder receives a replacement share or unit in exchange. It also provides special rules for calculating the Cost base / reduced cost base of the replacement share or unit. 51. Subdivision 124-M contains a number of conditions for, and exceptions to, a shareholder being able to choose scrip for scrip rollover. The main requirements that are relevant to the scheme that is the subject of this Ruling are: 52. The scheme that is the subject of this Ruling satisfies the requirements for scrip for scrip rollover under Subdivision 124-M. | Part IVA: 53. Based upon the specific facts and circumstances of this scheme, the Commissioner will not make a determination under section 177F in relation to the scheme as it does not constitute a scheme to which Part IVA applies. 54. This paragraph sets out the details of the provisions ruled upon or referenced in this Ruling. © 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).


Appendix: Availability of scrip for scrip rollover under Subdivision 124-M if capital gain is made: 50. One tax consequence that is the subject of this Ruling is the availability of scrip for scrip rollover under Subdivision 124-M. Scrip for scrip rollover enables a shareholder or unitholder to disregard a capital gain from the disposal of a share or a unit if the shareholder or unitholder receives a replacement share or unit in exchange. It also provides special rules for calculating the Cost base / reduced cost base of the replacement share or unit. 51. Subdivision 124-M contains a number of conditions for, and exceptions to, a shareholder being able to choose scrip for scrip rollover. The main requirements that are relevant to the scheme that is the subject of this Ruling are: 52. The scheme that is the subject of this Ruling satisfies the requirements for scrip for scrip rollover under Subdivision 124-M. | Part IVA: 53. Based upon the specific facts and circumstances of this scheme, the Commissioner will not make a determination under section 177F in relation to the scheme as it does not constitute a scheme to which Part IVA applies.


What this Ruling is about | Appendix 2 - Legislative provisions | 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. | Further, if we think that this Ruling disadvantages you, we may apply the law in a way that is more favourable to you.