What this ruling covers
The Australian Taxation Office has published Class Ruling CR 2026/41. The ruling sets out the income tax and capital gains tax (CGT) treatment for Peel Mining Limited shareholders who received shares in Spectre Metals Limited as a return of capital on 30 June 2026.
The ruling covers the period 1 July 2025 to 30 June 2026.
Who the ruling applies to
The ruling applies to shareholders who held ordinary shares in Peel Mining Limited on capital account and were registered at 7:00pm on 24 June 2026.
The ruling does not apply to shareholders who held Peel shares as trading stock or revenue assets, or to those subject to exclusions such as being a temporary resident, holding shares under an employee share scheme, or being subject to Division 230 financial arrangement rules.
Tax treatment of the distribution
The ruling confirms the following:
- The distribution is not a dividend and is not included in assessable income.
- Demerger rollover relief is not available.
- CGT event G1 applies to the return of capital.
How CGT event G1 works in this case
The outcome of CGT event G1 depends on whether the return of capital per Peel share exceeded the cost base in that share:
- If the return of capital exceeded the cost base: a capital gain equal to the difference arises, and the cost base in the Peel share is reduced to nil.
- If the return of capital did not exceed the cost base: no capital gain arises, and the cost base in the Peel share is reduced by the amount of the return of capital.
Key actions
- Check whether ordinary shares in Peel Mining Limited were held, registered at 7:00pm on 24 June 2026, and that Spectre Metals shares were received on 30 June 2026 - if so, this ruling applies.
- Confirm the Peel shares were held on capital account and that none of the exclusions apply.
- Calculate whether the return of capital per Peel share exceeded the cost base in each share - if it did, a capital gain equal to that excess is required to be declared in the 2025-26 tax return, with the Peel share cost base reduced to nil.
- If the return of capital did not exceed the cost base, reduce the recorded cost base in each Peel share by the amount of the return of capital and keep that updated record for any future disposal.
- If Peel shares were sold between the record date and the implementation date, note that CGT event C2 may apply instead - review the full ruling or consult a tax agent to confirm the position.
- Read the full ruling at https://www.ato.gov.au/law/view/document?docid=CLR/CR202641/NAT/ATO/00001.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.