New Energy Solar Stapled Security Tax Cost Base Allocation

Tax Information Relating to your New Energy Solar (NES) Stapled Security

A NES stapled security comprises a share in New Energy Solar Limited (NESL) and a unit in New Energy Solar Fund (NESF). This share and unit must be traded as one NES stapled security on the Australian Stock Exchange. However, NESL shares and NESF units each comprise separate assets for Australian capital gains tax purposes.

Your cost base for each NESL share and NESF unit will be equal to what you paid for each security together with any incidental costs of acquisition or disposal such as brokerage fees and stamp duty. The information provided below is designed to assist you apportion your cost base across each share and unit.

Cost base of securities acquired on market

The Australian Taxation Office state on their website that the allocation of any purchase price (or sale price) of the securities acquired (or sold) on market must be done on a reasonable basis.  “One reasonable basis of apportionment is to base it on the portion of the value of the stapled security that each security represented.”

The net assets of NESL and NESF at half year end are outlined below. This net asset information will be updated shortly after announcement of the NES Annual and Half Year Financial Results.

DateNet assets weighting NESLNet assets weighting NESF Information source
31 December 201744.57%55.43%2017 Annual Financial Report
30 June 201736.76%63.24%2017 Interim Financial Report
31 December 20165.79%94.21%2016 Annual Financial Report
30 June 2016 5.14%94.86%2016 Interim Financial Report

Cost Base of securities issued under the Distribution Reinvestment Plan (DRP) allotted 15 February 2018

The issue price under the DRP was $1.46 per stapled security with $0.647 for each share in NESL and $0.813 for each NESF unit.

Cost Base of securities issued under the Initial Public Offer equity raising allotted on 8 December 2017.

The Issue Price under the Initial Public Offer was $1.50 per stapled security with $0.735 for each NESL share and $0.765 for each NESF unit.

Cost Base of securities issued under the Distribution Reinvestment Plan (DRP) allotted 15 August 2017

The issue price under the DRP was $1.58 per stapled security with $0.5767 for each share in NESL and $1.0033 for each NESF unit.

Capital reallocation on 26 June 2017

NES reallocated capital from NESF to NESL on 26 June 2017. This was achieved by a capital return by NESF of $0.51 per issued unit in NESF, which was compulsorily applied as a capital contribution for existing shares in NESL.

The impact to securityholders as at 26 June 2017 was to increase the cost base for each NESL share held by $0.51 and decrease the cost base for each NESF unit held by $0.51.

More detail can be found at https://www.newenergysolar.com.au/investor-centre/disclosure

Cost Base of securities issued under the NES 2nd capital raising allotted on 9 December 2016

The Issue Price under the 2nd equity raising was $1.62 per stapled security with $0.081 for each new NESL share and $1.539 for each NESF unit.

If you held these securities after the capital reallocation on 26 June 2017 the cost base would be $0.591 for each NESL share and $1.029 for each NESF unit (plus any incidental acquisition costs).

Cost Base of securities issued under the NES initial capital raising allotted on 21 January 2016

The Issue Price under the initial equity raising was $1.60 per stapled security with $0.08 for each NESL share and $1.52 for each NESF unit.

If you held these securities after the capital reallocation on 26 June 2017 the cost base would be $0.59 for each NESL share and $1.01 for each NESF unit (plus any incidental acquisition costs).

Further Information

Further information on the tax treatment of stapled securities can be found on the Australian Taxation Office website.

You should not rely on this information as taxation or financial advice as it may not be relevant to your particular circumstances. You should seek specialist tax advice from your personal tax accountant or other tax adviser to determine the taxation consequences applicable to your circumstances