ATO Class Ruling for FireFly's in-specie distribution of Bellavista shares

Executive Summary

• FireFly Metals announces the Australian Taxation Office (ATO) has published Class Ruling CR 2026/30 confirming the Australian income tax treatment of its in-specie distribution of Bellavista Resources Ltd shares to eligible shareholders.
• The ruling confirms the distribution constitutes a non-dividend capital return of 4.5 cents per FireFly share, with specific cost base adjustments and capital gains tax (CGT) implications for eligible shareholders.
• The distribution was completed on May 11, 2026, following the receipt of 60 million Bellavista shares from the April 29, 2026 completion of the sale of the Pickle Crow and Sioux Lookout Projects.

Key Details

• ATO Class Ruling: CR 2026/30 published June 3, 2026, confirming tax treatment for eligible shareholders (those holding shares on capital account and not temporary residents as of the May 4, 2026 record date).
• Distribution Mechanics: 1 Bellavista ordinary share distributed for approximately every 12.8 FireFly shares held on the record date, subject to rounding adjustments.
• Total Shares Distributed: 60 million Bellavista shares (received by FireFly on April 29, 2026).
• Capital Return: 4.5 cents per FireFly share; explicitly not classified as a dividend and excluded from assessable income under subsection 44(1) of the Income Tax Assessment Act 1936.
• Anti-Avoidance: ATO confirmed sections 45, 45A, and 45B will not apply to treat any portion as an unfranked dividend.
• Cost Base Adjustment: FireFly share cost base reduced by 4.5 cents (not below nil); any excess over cost base is treated as a capital gain for the year ended June 30, 2026, potentially eligible for the CGT discount if held >12 months.
• Bellavista Share Cost Base: 58 cents per share, based on market value on the payment date (May 11, 2026).
• CGT Acquisition Date: Bellavista shares are deemed acquired on May 11, 2026.
• Ineligible Shareholders: Received cash proceeds of $0.546975 per Bellavista share they would have been entitled to, net of transaction costs/expenses. Payment dispatched May 27, 2026.
• Foreign Residents: Generally exempt from capital gains on the Capital Return unless shares/rights constitute taxable Australian property.
• Prior Transaction Context: Shares originated from the sale of FireFly’s Pickle Crow and Sioux Lookout Projects to Bellavista, announced February 2, 2026.