Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 9AA - Demutualisation of insurance companies and affiliates  

Subdivision B - Key concepts and related definitions  

SECTION 121AG   DEMUTUALISATION METHOD 2  

121AG(1)   [Transactions involved in demutualisation]  

Under demutualisation method 2 , in connection with the implementation of the demutualisation:

(a) all membership rights in the mutual insurance company are extinguished; and

(b) not more than 10 shares (the special shares ) in the mutual insurance company are issued to a trustee to hold for the benefit of the policyholder/member group, where:

(i) the issue takes place before the issue of the ordinary shares mentioned in paragraph (c); and

(ii) on the issue of all the ordinary shares, the rights attaching to the special shares become the same as those attaching to the ordinary shares; and

(c) a greater number of shares (the ordinary shares ) of only one class in the mutual insurance company are either:

(i) issued, at the election of each person in the policyholder/member group, to the person or to a trustee to sell on behalf of the person; or

(ii) issued to a trustee, at the election of each person in the policyholder/member group, to distribute to the person or to sell on behalf of the person; and

(d) the trustee sells the ordinary shares and distributes the proceeds to the person, or distributes the ordinary shares to the person; and

(e) the ordinary shares are listed within the listing period.

Note:

Other things may also happen in connection with the implementation of the demutualisation.

121AG(2)   [Diagram of transactions]  

The following diagram shows the main events, where this demutualisation method is used involving an election covered by subparagraph (1)(c)(ii).