RHG is seeking a tax ruling from the ATO about its proposed return of capital. I contacted a friend about the risk of this not being forthcoming and he had the following to say:
The issue the ATO might look at is whether they are doing things “pro-rata”.
So if they have very little capital and heaps of profits then large div/small capital return seems appropriate. However if they have a large amount of capital and are just doing “profits first” the ATO might make them do it on a more “pro-rata” basis.
Almost all of RHG’s $300m-odd in shareholders’ capital is retained earnings. The share buyback of the past few years ate all of the issued capital. So it looks as though the proposed structure of the buyback, $0.87 dividend and $0.01 capital, will be difficult for the ATO to argue with (not that I’d place too much emphasis on consistency or logic when trying to predict the ATO’s moves).
Functional cookies Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.