Overview 

1) Tulla Resources PLC (ASX: TUL) demerged of its wholly owned subsidiary, Phoenix Industrial Minerals Pty Ltd (Phoenix) which was implemented on 23 June 2023 (Demerger Scheme) 

Under the Demerger Scheme, Tulla shareholders received three Demerger Bonus Shares for each Tulla share held (CGT event G1 did not happen). Demerger relief (being demerger rollover pursuant to Division 125) is not available. 

The Commissioner accepts that it would be reasonable to apportion the first element of cost base or reduced cost base of original Tulla share as follows 

• 2.31% to the Demerger Bonus Shares, and
• 97.69% to the original Tulla share. 

On 22 June 2023, the share capital of Tulla was reduced by £1.5 million by cancelling all the Demerger Bonus Shares and the £1.5 million capital reduction amount was applied to pay up the subscription price (£0.0015) for each Phoenix share on behalf of Tulla shareholders. Tulla shareholders received one Phoenix share for every Demerger Bonus Share they held. The Phoenix shares were issued on 23 June 2023. 

Any capital gain or capital loss you make from CGT event C2 happening in relation to your Demerger Bonus Share is disregarded (subsection 130-60(3)). 

2) Exchange of Demerger Bonus Shares (i.e. TULXE) to Phoenix Industrial Minerals Pty Ltd (Unlisted shares), this step needs to be processed manually. 

3) Tulla Resources PLC (ASX: TUL) acquisition by Pantoro Limited (ASX: PNR), which was implemented on 30 June 2023 (Merger Scheme)

Under the Merger Scheme, Tulla shareholders were entitled to receive consideration of 4.9578 ordinary Pantoro shares for each Tulla share held, with any fractional entitlements rounded to the closest whole number of Pantoro shares. 

CGT event A1 happened when disposing of Tulla shares on the Merger Scheme Implementation Date of 30 June 2023 (subsections 104-10(1) to (3)). 

The Commissioner accepts that the market value of each Pantoro share was $0.0721. 

You may choose scrip for scrip rollover (section 124-780) provided you made a capital gain on disposal of your Tulla shares (paragraph 124-780(3)(b)). 

Parts 1) and 3) of this corporate action have been automated in Class, Part 2 needs to be processed manually using steps 2-6 below. 

How to process in Class 

As an example, an SMSF acquired 10,000 TUL shares at  a price of $0.30 per share in early 2023. To process the corporate actions, 

Navigate to Fund level > Investments > Browse Corporate Actions 

1. Click Action to process TUL demerger of its subsidiary (ASX: TULXE) as of 23 June 2023.
   
   
   Note to tick 'Yes' as if demerger relief is applicable
   
   
   
   
   
   
   
2. Create an unlisted shareholding account at the Business level for Phoenix Industries Pty Ltd (PIPL). Refer to New Unlisted Security - Business Level for more details; 
3. Update the 'Capital Gain Classification' of TULXE from Step 1 to 'Non CGT Asset'; 
   
   
   
   
4. Dispose of all 30,000 TULXE shares for £0.0015 per share (equivalent to AUD $0.00284576 per share) as of 23 June 2023; 
5. Purchase 30,000 Phoenix shares at £0.0015 per share (equivalent to AUD $0.00284576 per share) as of 23 June 2023; 
6. Match off steps 3 and 4;
   
   
   Navigate to Fund level > Investments > Browse Corporate Actions 
7. Click Action to process TUL takeover by Pantoro (ASX: PRN) as of 30 June 2023; 
   
   
   Note that scrip for scrip rollover relief is available