Leo Lithium (ASX:LLL) has received a Class Ruling from the Australian Taxation Office (ATO) confirming the tax treatment of its recent return of capital and special dividend, according to a Thursday filing with the Australian bourse.

The ruling confirms that Australian tax residents must include the special dividend in their assessable income, while non-residents will treat it as non-assessable, non-exempt income, exempt from withholding tax, the filing said.

Additionally, the return of capital is not classified as a dividend and will not be subject to the same tax treatment, the filing added.

LLL has advised shareholders to review the Class Ruling and consult advisers to understand the tax implications of the capital return and special dividend.