Annual List Examines Current Tax Season Challenges for Securities Firms
The list reflects the input of Capital Changes subscribers and corporate actions professionals and is compiled using a range of criteria from the breadth of affected securities to the level of complexity of the tax issues involved. The company has been compiling the annual top ten lists since 2003.
“With so much activity in cross-border mergers and breakups in 2013, transnational corporate actions involving multiple jurisdictions emerged as an area of particular concern,” said John Kareken, senior analyst for Capital Changes at Wolters Kluwer Financial Services. “As we see these trends continue into 2014 we can reasonably expect to see an increased emphasis on changes and payments on debt instruments, which must be analyzed both for cost basis reporting and for Foreign Account Tax Compliance Act (FATCA) determinations.”
“Regardless of any year-to-year trends we see in corporate actions, the need for accuracy is a constant,” said Richard Ryndak, senior product manager for Capital Changes at Wolters Kluwer Financial Services. “The reality is that every year we can expect to see a handful of exceptionally complex corporate actions, and these require a high level of expertise to unravel all the implications for shareholders and make sure the brokers get it right and minimize risk to their reputation.”
The following ten corporate actions were found to be particularly challenging, interesting, or representative of a particular tax issue in 2013:
- Liberty Media Corp. spinoff of Starz
- Granite Real Estate Inc. conversion to stapled unit REIT structure
- Petrobank Energy and Resources Ltd. reorganization and distribution involving PetroBakken Energy Ltd.
- Barclays PLC rights offering for ordinary and American Depository Shares
- Perrigo Co. merger into Irish holding company Perrigo Co. plc and acquisition of Elan Corp. plc
- Sprint Nextel Corp. merger into Softbank Corp.
- Pfizer Inc. split-off of Zoetis Inc.
- PPG Industries spin-off and merger of commodity chemicals business with Georgia Gulf Corp.
- North American Energy Partners Inc. consent solicitation to amend indenture for 9.125% series 1 senior unsecured debentures
- LIN TV liquidation and deemed contribution to LIN Media LLC