Australian Share Buy-backs 2000-2023 (last updated 05/01/2024)

Off-market buy-backs are an attractive capital management option for companies and their shareholders. Companies can buy-back their shares at a discount of up to 14% to the market value of the shares. Shareholders receive part of their disposal proceeds as a franked dividend for tax purposes, and may also realise a capital loss.

If you receive an offer from a company to buy back some or all of your shares in the company under a share buy-back arrangement, you may make a capital gain or loss. When you make the capital gain or loss will depend on the conditions of the particular buy-back offer. For example, it may be the time you lodge your application to participate in the buy-back, or, if it is a conditional offer of buy-back, the time you accept the offer.

To work out whether you've made a capital gain or loss, you compare the capital proceeds with your cost base and reduced cost base. The capital proceeds are taken to be what the share's market value would have been if the buy-back hadn’t occurred and was never proposed, less the amount of any dividend paid under the buy-back. Both of the following conditions apply:

•  
  • the shares are not bought back by the company in the ordinary course of business of a stock exchange – for example, the company writes to shareholders offering to buy their shares (commonly referred to as 'off-market share buy-back'), and
  • the buy-back price is less than what the market value of the share would have been if the buy-back hadn’t occurred and was never proposed.

In this situation, the company may provide you with the market value or may have obtained a class ruling from the Australian Taxation Office. If the buy-back price is what the market value of the share would have been if the buy-back hadn’t occurred and was never proposed, the capital proceeds is the amount paid, excluding any dividend paid.

Shareholders receiving a dividend in conjunction with an off-market buy-back should take note of the ATO’s updated guidance on the application of the 45 day rule and its impact on entitlement to franking credits. Broadly, the 45 day rule requires the shareholder to have held their shares ‘at risk’ for at least 45 days between the dates of acquisition and disposal of their shares. The 45 day rule has a “last in first out” (LIFO) rule, which deems shareholders to have disposed of their most recently acquired shares first for the purposes of working out whether they have satisfied the 45-day rule in respect of a dividend.  

An example of some of the off-market share buy-backs and their tax consequences feature in the table below. For the full table, updated at the end of each calendar year, please click on the link below the table.  

Companies featuring in the report: Aconex Limited  Alumina Limited  Ampol Limited  Ansell Limited  BHP Billiton  Bluescope Steel  Boral Limited  Caltex Australia  Careers Australia Group Limited  Central Equity Limited  Century Australia Investments Limited  CIC Australia Limited  CMI Limited  Coca-Cola Amatil  Coles Myer  Collins Foods Holding Pty Ltd  Commonwealth Bank  Commonwealth Prop (CPA)  Corporate Express Limited  Cuscal Limited  Eildon Capital Limited  European Gas (EGL)  Excelsior Capital Limited (formerly CMI Ltd)  Foster’s Group  Foster's Group  Gotalk Limited  Hastings Fund Mangt  Heidelberg District Community Enterprise Limited  IMB Limited  Insurance Australia Group  Intrepid Mines Limited  JB Hi-Fi Limited  Just Group Limited  Just Jeans Limited  Lemarne Corporation  Lend Lease Limited  Lion Selection Limited  Longevity Group Australia Limited  Macquarie Media Group  Mayne Group  McMillan Shakespeare Limited  Metcash Limited  MMC Contrarian Limited  Monash Absolute Investment Company Limited  Neon Capital Limited  New Energy Solar  NRMA Insurance (now IAG)  Oceania Capital  Oceania Capital Partners Ltd  OnCard International Limited  Pambula & District Community Development Limited  Perpetual Limited  Pinewood Community Financial Services Limited  PM Capital Asian Opportunities Fund Limited  PM Capital Global Opportunities Fund Limited  Portman Limited  Premium Investors Limited  Progen Pharmaceuticals Ltd   Qantas Airways Limited  Qube Holdings Limited  Reva Medical, Inc.  Rio Tinto  Seven Network  Santos Limited  Signature Capital  Staging Connections Group  St George Bank  Suncorp-Metway (Notes SBKHB)  Sunraysia Television Ltd  TAB Limited  Telstra  Templeton Global Growth Fund Ltd  Thinksmart Limited  Tower Limited  Tower Limited (small parcels)  U&D Coal Limited  Virgin Australia Holdings Ltd  Wesbeam Holdings Limited  Westpac  Woolworths