Steel and Tube funds tax-free

Press, 3 October 1979, Page 21

Steel and Tube funds tax-free

The Inland Revenue Department has now accepted that the sum of $3,044,000; shown in the capital re- ’ serves of the 1979 annual accounts of Steel and Tube. Holdings, Ltd, was now a source of tax-free funds, the directors say. In July it was reported that Steel and Tube was battling with the Inland Revenue Department about using the $3,044,000, arising from the sale of properties, as a source for tax-free dividends. At the annual meeting in July, the managing director (Mr D. C. Thurston) told shareholders that the question of the company’s re- i serves was to be taken to; the Supreme Court in the: hope that a declaratory'

statement would be handed down. I The directors say that “for ; technical reasons” they accept the Inland Revenue ■ Department’s ruling that the i funds from the sale of the properties were not available as a tax-free source at the time that the final dividend ■ of 5c a share was declared. I ‘‘This dividend is now taxable for all shareholders, and should be included in their 1979-80 tax returns.” The final dividend was paid on July 18.

' The directors also indicate [that the interim dividend of [4c a share, which was paid [in December, 1978, will also [be taxed. ' “With regard to the dividend of 4c a share paid in [December, 1978, it is likely that a portion relating to pre-acquisition capital realisations will be disallowed as tax-free." The Inland Revenue Department had indicated a reversal of an earlier clearance to. accept the dividend as tax-free, they said.