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The demutualisation of the life offices (AMP,
National Mutual and Colonial Mutual) has significantly boosted market
capitalisation and increased the number of shareholders over the past ten
years. The big advantage for members has been the exchange of an interest
that could not be traded, for shares that are listed on the Australian
Stock Exchange.
However, when they come to sell those shares, as a
general rule, shareholders are subject to Capital Gains Tax. Even though
nothing was paid for the shares, they have a value for CGT purposes, which
is reflected as “Acquisition Cost per share” in the table below. That
acquisition cost may be only part of the cost base which can be deducted
from the capital proceeds to arrive at the capital gain.
The cost base may also include costs associated
with the sale of the shares such as fees paid to a broker.
Below is a selection of demutualisations of the
past twenty odd years with the more recent demutualisations highlighted:
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DEMUTUALISATIONS SINCE 1985
Last updated: 28 September 2008
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Company |
Acquisition Cost per share |
Acquisition Date |
Notes (see below) |
| AMP Ltd |
$10.43 |
20
November 1997 |
1 |
| Australian Stock
Exchange Ltd |
N/A |
October 1998 |
2 |
| Canberra Perm BS to Canberra Adv Bank |
N/A |
August 1990 |
3 |
| Capita Financial Group |
N/A |
October 1990 |
3 |
| Civic Co-op PBS to Canberra Advance Bank
|
N/A |
June 1986 |
3 |
| Colonial Mutual
Life Assurance Ltd |
$3.31 |
11
November 1996 |
4 |
| First Provincial Building Society |
N/A |
November 1993 |
8 |
| Hibernian Friendly
Society (NSW) Limited |
$1.162 |
2
September 2002 |
7 |
| Illawarra Mutual Building Society |
N/A |
August 1989 |
8 |
| IOOF Ltd |
$2.53 |
14
June 2002 |
|
| Ipswich & West Moreton Bldg Society |
N/A |
October 1993 |
3 |
| Mackay Permanent Building Society |
N/A |
May 1993 |
8 |
| MBF Group |
N/A |
16 June
2008 |
9 |
| Metropolitan PBS to Metway Bank |
N/A |
July 1988 |
3 |
| National Mutual
Life (now AXA) |
$1.14 |
8
August 1995 |
|
| NIB Holdings
Ltd |
$0.85 |
1
October 2007 |
|
| Northern Building Society |
N/A |
July 1993 |
3 |
| NRMA Insurance
(NIGL) - allocated |
$1.78 |
19
June 2000 |
5 |
|
- facility |
$2.75 |
6
August 2000 |
6 |
| NSW Building Society to Advance Bank |
N/A |
June 1985 |
3 |
| Over 50s Mutual
Friendly Soc (OFM) |
$1.65 |
12
June 2001 |
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| Perth BS & Hotham PBS to Challenge
Bank |
N/A |
April 1987 |
3 |
| Pioneer Permanent Building Society |
N/A |
August 1993 |
8 |
| RESI-Statewide BS to Bank of Melbourne |
N/A |
July 1989 |
3 |
| St George Building Society |
N/A |
May 1987 |
8 |
| Sunstate Credit Union to First Provincial
BS |
N/A |
October 1997 |
3 |
| Tasmanian PBS to Tasmanian Bank |
N/A |
September 1987 |
3 |
| The Co-operative BS of SA to Adelaide
Bank |
N/A |
January 1994 |
3 |
| The Rock Building Society |
N/A |
December 1992 |
3 |
| United PBS to National Mutual R Savings
Bank |
N/A |
March 1987 |
3 |
| Wide Bay Capricorn Building Society |
N/A |
December 1992 |
8 |
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N/A =
Not Available PBS =
Permanent Building Society The
more recent demutualisations are highlighted
Notes:
- The acquisition cost per share of $10.43
applies to Australian residents disposing of AMP shares prior to
the demerger of the UK operations of AMP (to HHG), which took
place in December 2003. All other AMP/HHG shareholders should go
to the ATO website http://ato.gov.au/individuals/content.asp?doc=/content/46226.htm
as the tax consequences of the demerger are too complex to explain
here.
- ASX issued 166,000 shares to 606 former
members. There were two categories of members and the Acquisition
Cost or Cost Base is not on the public record. (Shares ended their
first day’s trading at $4.25.)
- For record purposes only.
- ATO advises that under sec 121AA of the
ITAA 1936, where a policyholder disposes of a listed
demutualisation share, the acquisition cost is the lesser of the
‘embedded value” of $3.66 and the listed first day trading price
of $3.31.
- If shares were sold through the Facility
the capital gain per share is the excess of the facility price of
$2.75 over the acquisition cost of $1.78.
- If more shares were purchased through the
Facility the acquisition cost of those additional shares is $2.75
each.
- The Tax Office granted Hibernian/Aevum an extension of time to list its shares after a two year period from it demutualising. Check on the ATO website for the tax concessions available to Hibernian/Aevum shareholders who were Hibernian members.
- Demutualisation via listing on an Exempt
Exchange.
- Participating Contributors received a cash
entitlement sent by the company on 30 June 2008 - the amount
allocated took into account the type of MBF health insurance
product held by the eligible MBF contributor on 8 November 2007,
such as hospital or ancillary, the scale of the policy they have
held over the years, i.e. Single or Non-Single, and their tenure
as a contributor. New tax legislation is being considered
and in the meantime the ATO has agreed to allow
recipients of the entitlement to lodge 2007/2008 tax
returns without including any capital gain arising from their
entitlement.
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