PRT : ATO Class Ruling

For personal use only

PRT Company Limited

ACN 000 764 867

PRT COMPANY LIMITED (ASX: PRT)

ASX Announcement

16 June 2022

AUSTRALIAN TAXATION OFFICE CLASS RULING

PRT Company Limited (the Company) advises that the Australian Taxation Office (ATO) has now issued Class Ruling CR2022/57 (the Ruling) in relation to the special dividend of $0.26 per ordinary fully paid PRT share (Special Dividend) and return of capital of $0.10 per ordinary fully paid PRT share (Return of Capital), (collectively the Distribution) paid to shareholders by the Company on 4 February 2022.

The Ruling sets out the income tax consequences in relation to the Distribution.

In summary, the Ruling confirms that for Australian tax resident shareholders who were registered as shareholders of the Company on 28 January 2022:

• the Special Dividend is a dividend as defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936); and
• the Special Dividend is a frankable distribution pursuant to section 202-40 and is capable of being franked in accordance with section 202-5; and
• the Return of Capital is not a dividend as defined in subsection 6(1) of the ITAA 1936 and no part of the Return of Capital is included in shareholders' assessable income as a dividend under section 44 of the ITAA 1936.

Shareholders should consult the Ruling when considering the tax implications of the Distribution and may wish to have regard to the Ruling when submitting their tax returns in respect of the financial year ended 30 June 2022.

This announcement is a summary only and does not constitute tax advice or take into account the individual circumstances of each shareholder. Shareholders are encouraged to seek independent taxation advice relevant to their particular circumstances.

The Class Ruling is available on the ATO website at https://www.ato.gov.au/law. A copy is also attached to this announcement.

As previously announced, the Board was reconstituted on 31 March 2022 to continue, during the process of finalising the issue of the ATO Tax Ruling, discussions with WA Chess Investments Pty Ltd regarding an alternative transaction for the Company.

As at the date of this announcement, no formal proposal has been received although the discussions continue and are anticipated to conclude in the short to medium term. These discussions may or may not result in a transaction. If there is no transaction the Board may consider other alternatives including liquidation.

The Board will consider the best course for shareholders during financial year 2023. -Ends

Authorised for release by the Board of PRT Company Limited.

PRT Company Limited ABN 97 000 764 867

363 Antill Street, Watson ACT 2602

www.prtcompany.com.au

For personal use only

PRT Company Limited

ACN 000 764 867

For further information, please contact:

Ms Sophie Karzis

1. [e-mail]

1. [phone]

PRT Company Limited ABN 97 000 764 867

363 Antill Street, Watson ACT 2602

www.prtcompany.com.au

For personal use only

Class Ruling

CR 2022/57

Status: legally binding

Class Ruling

PRT Company Limited - distribution of special dividend and return of capital following sale of assets

Relying on this Ruling

This publication (excluding appendix) is a public ruling for the purposes of the Taxation Administration Act 1953.

If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.

Table of Contents	Paragraph
What this Ruling is about	1
Who this Ruling applies to	4
When this Ruling applies	6
Ruling	7
Scheme	37
Appendix - Explanation	55

What this Ruling is about

1. This Ruling sets out the income tax consequences for holders of ordinary shares of PRT Company Limited (Prime), formerly known as Prime Media Group Limited
   before 5 January 2022, who received a special dividend and a return of capital (collectively, the Distribution) on 4 February 2022 (Payment Date).
2. Full details of this scheme are set out in paragraphs 37 to 54 of this Ruling.
3. All legislative references in this Ruling are to the Income Tax Assessment Act 1997 (ITAA 1997), unless otherwise indicated.

Who this Ruling applies to

4. This Ruling applies to you if you:

• were registered on the Prime share register on 28 January 2022 for determining your entitlement to participate in the Distribution (Record Date)
• held your Prime shares on capital account on the Record Date; that is, you did not hold your Prime shares on revenue account (as defined in section 977-50) or as trading stock (as defined in subsection 995-1(1))
• received the fully franked special dividend of $0.26 per Prime share on the Payment Date (Special Dividend)

Class Ruling CR 2022/57

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Class Ruling

CR 2022/57

Status: legally binding

• received the return of capital of $0.10 per Prime share on the Payment Date (Return of Capital)
• would not be deemed to have acquired your Prime shares prior to 20 September 1985, and
• would not be subject to tax under Subdivision 83A-C in respect of your Prime shares.

5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 in relation to the scheme outlined in paragraphs 37 to 54 of this Ruling.

Note: Division 230 will not apply to individuals, unless they have made an election for it to apply.

When this Ruling applies

6. This Ruling applies from 1 July 2021 to 30 June 2022.

Ruling

Special Dividend

1. The Special Dividend is a 'dividend' as defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936).
2. The Special Dividend is a frankable distribution pursuant to section 202-40 and is capable of being franked in accordance with section 202-5.

Assessability of the Special Dividend, franking credits and tax offsets

Residents

1. If you are a resident of Australia as defined in subsection 6(1) of the ITAA 1936, you are required to include the Special Dividend in your assessable income (subparagraph 44(1)(a)(i) of the ITAA 1936).
2. If you satisfy the residency requirements in section 207-75, you include the franking credits attached to the Special Dividend in your assessable income and you are entitled to a tax offset equal to the amount of those credits (section 207-20), provided you are a 'qualified person' in relation to the Special Dividend as defined in former Division 1A of Part IIIAA of the ITAA 1936.
3. If you receive the Special Dividend as a trustee of a trust (not being a complying superannuation entity) or as a partnership and you are not a corporate tax entity, the franking credits attached to the Special Dividend are included in your assessable income, provided you are a qualified person (subsection 207-35(1)).
4. If you are a partner in a partnership or a beneficiary of a trust and the Special Dividend flows indirectly through the partnership or trust to you, you include your share of the Special Dividend in your assessable income and you are entitled to a tax offset equal to your share of the franking credit attached to the Special Dividend, provided both you, and the partnership or trust as is relevant, are each a qualified person in relation to the Special Dividend (section 207-45 and former subsection 160APHU(1) of the ITAA 1936).

Class Ruling CR 2022/57

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Class Ruling

CR 2022/57

Status: legally binding

1. If you are an Australian-resident corporate tax entity, a credit of the franking credit attached to the Special Dividend will arise in your franking account on the Payment Date (table item 3 in subsection 205-15(1)).
2. This tax offset is refundable, subject to the refundable tax offset rules in

Division 67.

Non-residents carrying on a business at or through a permanent establishment

1. If you are a non-resident and the Special Dividend is attributable to a permanent establishment in Australia, you include the Special Dividend in your assessable income (paragraphs 44(1)(b) and (c) of the ITAA 1936) and you are not liable to pay withholding tax in respect of the Special Dividend (subsection 128B(3E) of the ITAA 1936).
2. If you are also a qualified person in relation to the Special Dividend, you include the amount of the franking credits attached to the Special Dividend in your assessable income and you are entitled to a tax offset equal to the amount of those credits (section 207-20 and subsection 207-75(2)).
3. This tax offset is not refundable (subsection 67-25(1DA)).

Non-residents not carrying on a business at or through a permanent establishment

1. If you are a non-resident and the Special Dividend is not attributable to a permanent establishment in Australia, the Special Dividend is not included in your assessable income (section 128D of the ITAA 1936) and you are not liable to withholding tax in respect of the Special Dividend (paragraph 128B(3)(ga) of the ITAA 1936).
2. You do not include the amount of the franking credits attached to the Special Dividend in your assessable income and you are not entitled to a tax offset for those franking credits (sections 207-20 and 207-70).

Qualified persons

1. The Special Dividend you received does not constitute a 'related payment' for the purposes of paragraph 207-145(1)(a) and former section 160APHN of the ITAA 1936 and the primary qualification period therefore applies.
2. You will be a qualified person in relation to the Special Dividend if, during the period from the day after you acquired your Prime shares to 15 March 2022 (inclusive), you held your Prime shares for a continuous period of at least 45 days during which you did not have 'materially diminished risks of loss or opportunities for gain', as defined in former section 160APHM of the ITAA 1936, in respect of the shares.

Exempting entity

1. Prime was not an 'exempting entity', nor was it a 'former exempting entity', at the Payment Date (sections 208-20 and 208-50).
2. Therefore, section 208-195 will not apply to deny the gross up of your assessable income by the amount of the franking credits attached to the Special Dividend you received, nor to deny the tax offset to which you may otherwise be entitled, under Division 207.

Class Ruling CR 2022/57

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