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-E - Miscellaneous  

SECTION 125-235   Share and interest sale facilities  

Share and interest sale facilities

125-235(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).

125-235(2)    
The facility is treated as not owning the roll-over interest at the deeming time.

125-235(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.