Overview
The Australian Taxation Office (ATO) has issued Class Ruling CR 2026/49 relating to WAM Capital Limited's Dividend Substitution Share Plan (DSSP). The ruling was detected on 11 August 2026 and covers the period from 1 July 2026 to 30 June 2031.
What the plan involves
Under the DSSP, eligible WAM Capital shareholders can elect to receive bonus shares instead of cash dividends. The ruling sets out how these bonus shares are treated for income tax purposes.
Key tax treatment confirmed by the ruling
- Not treated as dividends: Bonus shares received under the DSSP are not treated as dividends for income tax purposes.
- No franking credits: No franking credits attach to bonus shares received under the DSSP.
- Cost base apportionment: The cost base of original WAM Capital shares is spread across both the original shares and the new bonus shares on a pro rata basis across the combined parcel.
Scope of the ruling
The ruling applies to Australian resident shareholders who hold their WAM Capital shares on capital account. It does not apply to shareholders who hold shares as trading stock or as revenue assets. The ruling covers the period 1 July 2026 to 30 June 2031.
To be covered by the ruling, a shareholder is required to be listed on the share register at the record date and to hold shares on capital account.
Key actions
- Confirm eligibility under the ruling - the ruling requires that a shareholder be an Australian resident, listed on the share register at the record date, and hold shares on capital account rather than as trading stock.
- Correctly apportion the cost base of original WAM Capital shares across both original and bonus shares received, as the ruling requires a pro rata split across the combined parcel.
- Do not include franking credits in a tax return for bonus shares received under the DSSP - the ruling confirms no franking credits attach to these shares.
- Review the full ruling at ATO website - CR 2026/49 to confirm the scheme matches individual circumstances before relying on it.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.