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Capital Management Strategies

Published on 09 Mar 2006 | Took place at City West Function Centre, West Perth , WA

Companies are becoming more sophisticated in managing their capital. Should a company buy-back shares, return capital, or pay dividends to its shareholders? Increasingly, your clients and principals need to understand the tax implications of these strategies, including maximising after tax returns for shareholders.

Mark Ferrier, one of the leading practitioners in this area in Australia, examines the opportunities and highlights the specific anti-avoidance provisions of the Tax Act. Don’t be caught out in this complex area of the law!

Learn about the tax implications for both companies and their shareholders of managing capital, including:
- understanding the various ways in which a company can manage its capital and make distributions to its shareholders
- be equipped with the practical tools to maximise after-tax returns to shareholders
- understand how different types of distributions are taxed
- dealing with the ATO in carrying out capital management strategies
- the specific tax provisions on demergers
- the interest deductibility of borrowing to fund these strategies.

Individual sessions

Taxation impacts of capital management

Author(s):  Mark FERRIER,  Tim KYLE

This paper covers:

  • the ATO's position
  • application of section 45B
  • alternatives:
    • special dividend
    • capital return/reduction
    • on-market buy-back
    • off-market buy-back
    • demergers (including stapling)
    • when interest deductions will be allowed.
This paper was also presented at the Capital Management Strategies seminar held in Perth on 9 March 2006.
Materials from this session: