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This Ruling sets out the tax consequences for the unitholders of GARDA Diversified Property Fund (GDF) when GDF distributed all of the shares in its newly incorporated, wholly-owned subsidiary, GARDA Holdings Limited (GHL) to its unitholders.

Full details of this scheme are set out in paragraphs 13 to 22 of this Ruling.

Legislative references in this Ruling are to provisions of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 (as detailed in the table in Appendix 2 of this Ruling).

This Ruling applies to you if you are an Australian resident for income tax purposes and you: • were the registered holder of units in GDF on 21 November 2019 (the Record Date) • held your units in GDF on capital account. That is, you did not hold your units in GDF as revenue assets (as defined by section 977-50) or as trading stock (as defined in subsection 995-1(1)) on the Record Date, and • received the shares in GHL on 21 November 2019 (the Payment Date).

This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 of the Income Tax Assessment Act 1997 in relation to the scheme outlined in paragraphs 13 to 22 of this Ruling. Note: Division 230 will not apply to individuals, unless they have made an election for it to apply.

This Ruling applies from 1 July 2019 to 30 June 2020.

The distribution of trust capital in the form of shares in GHL is not ordinary income for you under subsection 6-5(1) and will not be included in your assessable income pursuant to subsection 99B(2).

The distribution of shares in GHL is property that you had a right to receive (and received) in respect of your units during the financial year ending 30 June 2020 and formed part of the attribution managed investment trust (AMIT) cost base reduction amount for you for that year.

If the cost base of your interests in GDF is reduced to nil, any further negative net amount results in a capital gain under CGT event E10 (section 104-107A).

The Cost base / reduced cost base of the shares in GHL was their market value on the Payment Date. At the time that the shares in GHL were distributed they had a nominal value of $0.0001 per share, which was equivalent to the value of the return of capital.

You are taken to have acquired the shares in GHL on the Payment Date.

No CGT event in Division 104 happened as a consequence of the stapling of each GHL share to each GDF unit.

The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon.

GDF is an Australian unit trust.

GDF is an AMIT which validly made the deemed Managed Investment Trust capital treatment election.

GDF has been listed on the Australian Securities Exchange since 2 July 2015.

GARDA Capital Limited (GCL) is the responsible entity for GDF.

GDF incorporated GHL on 20 September 2019.

GHL was incorporated with the same number of shares as there are units in GDF and with a nominal value of $0.0001 per share.

GHL incorporated a wholly-owned subsidiary company, GDF Sub Co, and elected to form a consolidated group for the purposes of Part 3-90 with GDF Sub Co as the sole subsidiary member.

On the Payment Date, GDF distributed all of the shares in GHL to its unitholders as a return of capital, having resolved that the distribution of the shares in GHL would be a distribution of trust capital for the financial year ending 30 June 2020. As such, each unitholder received one share in GHL for each unit held in GDF on the Payment Date.

The units in GDF and the shares in GHL were subsequently stapled together on a 1:1 basis.

The distribution in the form of shares in GHL (nominal value of $0.0001 per share) for each unit in GDF was a distribution of trust capital for the year ending 30 June 2020 (being a payment of corpus). This distribution is not considered ordinary income for you under subsection 6-5(1).

On the basis that GDF resolved that the distribution of the shares in GHL was a distribution of trust capital for the year ending 30 June 2020, the receipt of the shares in GHL did not result in you being presently entitled to a share of the income of GDF. Therefore, no amount will be included in your assessable income pursuant to subsection 99B(2).

Sections 104-107A to 104-107H apply to members of AMITs to annually adjust the cost base of the members' units or interests for CGT purposes.

Under section 104-107B a member makes an annual adjustment to the cost base of their unit or interest in an AMIT. The adjustment is to be made just before the end of the income year, or just before the time of a relevant CGT event.

The amount by which the cost base is actually adjusted under section 104-107B is the net difference between the AMIT cost base reduction amount and the AMIT cost base increase amount as worked out under section 104-107E. This is called the AMIT cost base net amount, and it is worked out under section 104-107C.

Under section 104-107D, the cost base of a member's interest or unit in an AMIT is effectively reduced by the AMIT cost base reduction amount for the income year, being the total of: • money, and the market value of any property, attributable to the interest or unit, that they start to have a right to receive in that year, and • the amounts of all tax offsets attributable to the member's interests or units to the extent that the receipt is not as a result of CGT events A1, C2, E1, E6 or E7.

The distribution of shares in GHL is property that you had a right to receive (and received) in respect of your units during the year ending 30 June 2020 and will, therefore, form part of the AMIT cost base reduction amount for you for that year.

If the cost base of the units in GDF is reduced to nil, any further negative net amount results in a capital gain under CGT event E10 in accordance with section 104-107A.

You acquired shares in GHL without incurring any expenditure. As the requirements in subsection 112-20(1) are satisfied, it applies to modify the first element of the Cost base / reduced cost base of the shares in GHL to be their market value. At the time that the shares in GHL were distributed they had a nominal value of $0.0001 per share. This value was equivalent to the value of the return of capital and is their market value.

CGT event A1 occurred for GDF under section 104-10 when it disposed of the shares in GHL to you. No contract was entered into between the parties to effect the transaction. Therefore, you are taken to have acquired the shares in GHL at the time when GDF stops being the owner of the shares in GHL (being the Payment Date).

No CGT event in Division 104 happened as a consequence of the stapling of each GHL share to each GDF unit. Equally, no income tax consequences arose for you from the stapling.

This paragraph sets out the details of the provisions ruled upon or referenced in this Ruling. Income Tax Assessment Act 1936 subsection 99B(2) Income Tax Assessment Act 1997 Part 3-90 Income Tax Assessment Act 1997 subsection 6-5(1) Income Tax Assessment Act 1997 Division 104 Income Tax Assessment Act 1997 section 104-10 Income Tax Assessment Act 1997 section 104-107A Income Tax Assessment Act 1997 section 104-107B Income Tax Assessment Act 1997 section 104-107C Income Tax Assessment Act 1997 section 104-107D Income Tax Assessment Act 1997 section 104-107E Income Tax Assessment Act 1997 section 104-107F Income Tax Assessment Act 1997 section 104-107G Income Tax Assessment Act 1997 section 104-107H Income Tax Assessment Act 1997 subsection 112-20(1) Income Tax Assessment Act 1997 Division 230 Income Tax Assessment Act 1997 section 977-50 Income Tax Assessment Act 1997 subsection 995-1(1)