Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 125 - Demerger relief  

Subdivision 125-B - Consequences for owners of interests  

Operative provisions

SECTION 125-65   Meanings of demerger group , head entity and demerger subsidiary  

125-65(1)    
A demerger group comprises the *head entity of the group and one or more *demerger subsidiaries.

Note:

An entity may be a member of one or more demerger groups.

125-65(2)    
A trust cannot be a member of a demerger group unless *CGT event E4 is capable of applying to all of the units and interests in the trust.

Note:

A discretionary trust cannot be a member of a demerger group.

125-65(2A)    

Neither a corporation sole nor a *complying superannuation entity is a member of a *demerger group.

125-65(3)    
A company or trust is the head entity of a *demerger group if no other member of the group owns *ownership interests in the company or trust.

125-65(4)    
If apart from this subsection, a company or trust would be the *head entity of a *demerger group and the company or trust, and all of its *demerger subsidiaries, are also demerger subsidiaries of another company or trust in another demerger group, the first-mentioned company or trust is not the head entity of a demerger group.

125-65(5)    
A company or trust (the first company or trust ) that would, apart from this subsection, be a member of a demerger group is not a member of the demerger group if:

(a) the first company or trust owns, either alone or together with another company or trust that would, apart from this subsection, be a member of the *demerger group, more than 20% but less than 80% of the *ownership interests in a *listed public company or *listed widely held trust; and

(b) the listed public company or listed widely held trust chooses that the first company or trust not be a member of the demerger group.

125-65(6)    
A company is a demerger subsidiary of another company or a trust that is a member of a *demerger group if the other company or the trust, either alone or together with other members of the group, owns, or has the right to *acquire, *ownership interests in the company that carry between them:

(a) the right to receive more than 20% of any distribution of income or capital by the company; or

(b) the right to exercise, or control the exercise of, more than 20% of the voting power of the company.

125-65(7)    
A trust is a demerger subsidiary of another trust or a company that is a member of a *demerger group if the other trust or the company, either alone or together with other members of the group, owns, or has the right to *acquire, *ownership interests in the trust that carry between them the right to receive more than 20% of any distribution of income or capital by the trustee.