BHP (the holding company of an Australian group) owned 100% of the shares of BHP Petroleum. Under an arrangement in June 2022 BHP exchanged all of its BHP Petroleum shares for an issue of shares by Woodside Energy (another Australian company) which after issue amounted to 48% of the total issued share capital of Woodside Energy. BHP then immediately distributed those new shares to its own shareholders.
The distribution is charged against revenue reserves in the accounts of BHP and is regarded as a taxable dividend for Australian residents. One UK asset manager shows this as a taxable dividend another does not. ITTOIA 2005 s 402 which taxes dividends from non-UK resident companies excludes dividends of a capital nature. HMRC manual SAIM5210 says that if the ‘corpus of the asset’ is left intact after the distribution it is income but if not...
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