(1) You can choose to obtain a roll - over if:
(a) you own an * ownership interest in a company or trust (your original interest ); and
(b) the company or trust is the * head entity of a * demerger group; and
(c) a * demerger happens to the demerger group; and
(d) under the demerger, a * CGT event happens to your original interest and you * acquire a new or replacement interest (your new interest ) in the * demerged entity.
Note 1: Section 125 - 80 sets out what the roll - over is.
Note 2: You have to make cost base adjustments even if there is no CGT event: see section 125 - 90.
Example: Peter owns shares (his original interests) in Company A, a public company. Company B is a wholly owned subsidiary of Company A. Company A announces a demerger utilising a proportionate capital reduction and the disposal of all its shares in Company B to its 320,000 shareholders. Following the demerger all of the shareholders in Company A, including Peter, will own all of the shares in Company B (their new interests).
(2) You cannot choose to obtain a roll - over under this Subdivision for an original interest if:
(a) you are a foreign resident; and
(b) the new interest you * acquire under the * demerger in exchange for that original interest is not * taxable Australian property just after you acquire it.
Note: For taxable Australian property , see section 855 - 15.