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INCOME TAX ASSESSMENT ACT 1997 - SECT 125.235

Share and interest sale facilities

Share and interest sale facilities

  (1)   An entity (the investor ) is treated as owning an * ownership interest (the roll - over interest ) in a * demerged entity at a time (the deeming time ), if:

  (a)   the investor owned an ownership interest in a company or trust that was the * head entity of a * demerger group; and

  (b)   a * demerger happens to the demerger group; and

  (c)   because:

  (i)   a * foreign law impedes the ability of a member of the demerger group to issue or transfer the roll - over interest to the investor; or

  (ii)   it would be impractical or unreasonably onerous to determine whether a foreign law impedes the ability of a member of the demerger group to issue or transfer the roll - over interest to the investor;

    it is * arranged that the member will issue or transfer the roll - over interest to another entity (the facility ) under the demerger instead of to the investor; and

  (d)   in accordance with that arrangement and as a result of the demerger, the facility:

  (i)   becomes the owner of the roll - over interest (which is a new or replacement interest in the demerged entity); and

  (ii)   owns the roll - over interest at the deeming time; and

  (e)   under the arrangement, the investor is entitled to receive from the facility:

  (i)   an amount equivalent to the * capital proceeds of any * CGT event that happens in relation to the roll - over interest (less expenses); or

  (ii)   if a CGT event happens in relation to the roll - over interest together with CGT events happening in relation to other ownership interests--an amount equivalent to the investor's proportion of the total capital proceeds of the CGT events (less expenses).

  (2)   The facility is treated as not owning the roll - over interest at the deeming time.

  (3)   This section applies for the purposes of:

  (a)   applying this Division in relation to the demerger; and

  (b)   item   2 of the table in subsection   115 - 30(1), to the extent that it relates to a roll - over under this Division that involves the demerger.

Table of Subdivisions

  Guide to Division   126

126 - A   Marriage or relationship breakdowns

126 - B   Companies in the same wholly - owned group

126 - C   Changes to trust deeds

126 - D   Small superannuation funds

126 - E   Entitlement to shares after demutualisation and scrip for scrip roll - over

126 - G   Transfer of assets between certain trusts


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