What this ruling covers
The Australian Taxation Office has issued Class Ruling CR 2026/66 about the tax treatment for shareholders of Brazilian Rare Earths Limited (BRE) who received shares in Alurion Resources Limited as a return of capital on 24 July 2026.
The ruling confirms this distribution was a demerger for tax purposes and sets out how capital gains tax (CGT) applies. The ruling applies for the 2026-27 income year (1 July 2026 to 30 June 2027).
Who the ruling covers
The ruling applies to shareholders who held BRE shares on the record date of 22 July 2026 and still held them on 24 July 2026, and who received Alurion Resources Limited shares as a result.
The ruling does not apply to shareholders who have elected into Division 230 (taxation of financial arrangements).
Demerger rollover option
Eligible shareholders can choose a demerger rollover to defer any capital gain. Choosing the rollover means any capital gain from CGT event G1 is disregarded, but the cost bases for both share parcels must be recalculated.
Cost base allocation
The ATO accepts the following split of a shareholder's original BRE cost base:
- 89.2% remains allocated to the BRE shares.
- 10.8% is allocated to the Alurion Resources shares received.
This 89.2% / 10.8% split applies whether or not a shareholder chooses the demerger rollover.
CGT discount and acquisition date
For the purpose of the 50% CGT discount, Alurion Resources shares are treated as acquired on the same date the corresponding BRE shares were originally acquired. This treatment can affect whether the 50% CGT discount applies on a future sale of Alurion shares.
Key actions stated in the ruling
- Shareholders who held BRE shares on 22 July 2026 and received Alurion shares on 24 July 2026 are required to decide whether to choose the demerger rollover.
- The cost base of BRE shares and new Alurion shares must be recalculated using the 89.2% / 10.8% split of the total original BRE cost base.
- Shareholders are required to check whether Division 230 applies to them - if a Division 230 election is in place, this ruling does not apply.
Full ruling
The full text of CR 2026/66 is available at the ATO website: https://www.ato.gov.au/law/view/document?docid=CLR/CR202666/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.