Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-32 - CO-OPERATIVES AND MUTUAL ENTITIES  

Division 316 - Demutualisation of friendly society health or life insurers  

Subdivision 316-B - Capital gains and losses connected with the demutualisation  

Gains and losses of members, insured entities and successors

SECTION 316-55   Disregarding capital gains and losses, except some involving receipt of money  

316-55(1)    
Disregard an entity ' s *capital gain or *capital loss from a *CGT event that happens under the demutualisation to a *CGT asset if:

(a) the entity:

(i) is or has been a *member of the *friendly society; or

(ii) is or has been insured through the friendly society or a health/life insurance subsidiary of the friendly society; and

(b) the CGT asset is one of these (an interest affected by demutualisation ):

(i) an interest in the friendly society as the owner or holder of a policy of insurance with the friendly society or health/life insurance subsidiary;

(ii) a *membership interest in the friendly society;

(iii) a right or interest of another kind in the friendly society;

(iv) a right or interest of another kind that arises under the demutualisation, except an interest in a lost policy holders trust (see section 316-155 ).

Note:

Subdivision 316-D deals with the effects of CGT events happening to interests in lost policy holders trusts.

316-55(2)    
Disregard a *capital gain or *capital loss of an entity (the successor ) from a *CGT event that happens under the demutualisation to a *CGT asset if:

(a) the successor is the *legal personal representative, or beneficiary in the estate, of a deceased individual who was:

(i) a *member of the *friendly society; or

(ii) insured through the friendly society or a health/life insurance subsidiary of the friendly society; and

(b) the CGT asset:

(i) forms part of the deceased individual ' s estate; and

(ii) devolves or *passes to the successor; and

(iii) is an interest affected by demutualisation (see paragraph (1)(b)).