Assume the following facts and respond to the task below:

• The buy-back is finalised. The market value of the shares at all relevant times leading up to the buy-back is $31 per share.
• The buy-back price was $28 per share ($5 debit to share capital account, with the rest paid from retained earnings).
• Any deemed dividend component of the buy-back payment would be fully franked.

Using the template table attached, calculate the consequences per share of participating in the buy-back per share for three kinds of entities (individual, superannuation fund, and company). Calculate the income tax consequences (including capital gains), and net cash consequences of participating in the buy-back compared to selling the shares at the market value. Assume the relevant shares were acquired at a value of $20 each 2 years ago.

Calculations Resource Table 1: per share tax and net cash consequences of selling shares on the market Step 1: calculate income tax on capital Individual (assume marginal tax rate Superannuation fund (15% tax rate) Company (30% tax rate) gain of 47% including Medicare levy) (0) Cost base $20 $20 $20 (ii) Sale proceeds $31 $31 $31 Bold Gross gain $11 $11 $11 $1.10 $3.30 (iv) Net tax per share (after $2.60 capital gains discount) Step 2: Calculate total net cash impact $28.40 of selling at market value $29.90 $27.70 Task 3 Template Copy Table 2: per share tax and net cash consequences of participating in the share buy-back Step 1: calculate income tax on capital Individual (assume Super fund (15% tax rate) Company (30% tax rate) component marginal tax rate of 47%) Brief reason for outcomes (hint: most important for (ii) and (vi)) (0) Cost base (1) Capital proceeds () Gross gain/(loss) (iv) Net tax/(refund) per share (including discount) (V) Current cash impact (vi) Potential future cash impact Super fund (15% tax rate) Company (30% tax rate) Step 2: Calculate income tax on dividend component (0) Cash dividend Individual (assume marginal tax rate of 47%) Brief reason (hint: most important for (i), (ii)) (1) Add franking credit (1017) Calculate gross tax (iv) Apply franking credit offset (V) Net tax/(refund) per share Step 3: Calculate total net tax Step 4: Calculate total current net cash impact of participating in buy-back Step 5: Calculate total current and future maximum cash impact of participating in buy-back Calculations Resource Table 1: per share tax and net cash consequences of selling shares on the market Step 1: calculate income tax on capital Individual (assume marginal tax rate Superannuation fund (15% tax rate) Company (30% tax rate) gain of 47% including Medicare levy) (0) Cost base $20 $20 $20 (ii) Sale proceeds $31 $31 $31 Bold Gross gain $11 $11 $11 $1.10 $3.30 (iv) Net tax per share (after $2.60 capital gains discount) Step 2: Calculate total net cash impact $28.40 of selling at market value $29.90 $27.70 Task 3 Template Copy Table 2: per share tax and net cash consequences of participating in the share buy-back Step 1: calculate income tax on capital Individual (assume Super fund (15% tax rate) Company (30% tax rate) component marginal tax rate of 47%) Brief reason for outcomes (hint: most important for (ii) and (vi)) (0) Cost base (1) Capital proceeds () Gross gain/(loss) (iv) Net tax/(refund) per share (including discount) (V) Current cash impact (vi) Potential future cash impact Super fund (15% tax rate) Company (30% tax rate) Step 2: Calculate income tax on dividend component (0) Cash dividend Individual (assume marginal tax rate of 47%) Brief reason (hint: most important for (i), (ii)) (1) Add franking credit (1017) Calculate gross tax (iv) Apply franking credit offset (V) Net tax/(refund) per share Step 3: Calculate total net tax Step 4: Calculate total current net cash impact of participating in buy-back Step 5: Calculate total current and future maximum cash impact of participating in buy-back