Can government fix it

Allow TFNs to be transferred in a demerger

Under current arrangements shareholders of listed companies are asked to provide their TFN to the investee company. If shareholders do not provide their TFN, the company must withhold tax at the highest marginal rate on any non-fully franked dividends paid to these shareholders.


In a demerger situation, the demerging company is not permitted to transfer the TFN of a shareholder that will also have or has a shareholding in the resulting spin-off company. As a consequence, the spin-off company must ask each shareholder to provide their TFN.


The Board notes that a streamlining of the process of obtaining TFNs from shareholders of a spin-off company following a demerger could reduce compliance costs for demerger companies and their shareholders.


Does the community think that in respect of demergers it is appropriate for the demerging company to transfer the TFNs of shareholders having an interest in the spin-off company? If not, why not?



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Idea No. 68