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 121AL   DEMUTUALISATION METHOD 7  

121AL(1)   [Transactions involved in demutualisation]  

Under demutualisation method 7 , in connection with the implementation of the demutualisation of both a mutual insurance company and a mutual affiliate company:

(a) all membership rights in both companies are extinguished; and

(b) shares in the mutual insurance company and the mutual affiliate company are issued to another company (the holding company ); and

(c) shares (the ordinary shares ) of only one class in:

(i) the holding company; or

(ii) another company (the ultimate holding company ) of which the holding company is a wholly-owned subsidiary, either directly or through one or more other wholly-owned subsidiaries (each of which is an interposed holding company );

are either:

(iii) 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

(iv) 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 of the sale 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.

121AL(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)(iv).