Income Tax Assessment Act 1936

S 26AAD repealed by No 133 of 2009, s 3 and Sch 1 item 15, applicable in relation to the ESS interests mentioned in subsections 83A-5(1) and (2) of the Income Tax (Transitional Provisions) Act 1997 . S 26AAD formerly read:

SECTION 26AAD THE EFFECT OF 100% TAKEOVERS AND RESTRUCTURES ON THE OPERATION OF SECTION 26AAC  
26AAD(1) Treating acquisitions as continuations of existing shares etc.  

To the extent that:

(a) a taxpayer acquires:

(i) shares in a company (the new company ) that can reasonably be regarded as matching shares in another company (the old company ) that the taxpayer had acquired under a scheme for the acquisition of shares by employees; or

(ii) rights to acquire shares in a company (the new company ) that can reasonably be regarded as matching rights in another company (the old company ) that the taxpayer had acquired under a scheme for the acquisition of shares by employees; and

(b) the acquisition occurs in connection with a 100% takeover, or a restructure, of the old company; and

(c) as a result of the takeover or restructure, the taxpayer ceased to hold the shares or rights in the old company;

then, if the conditions in subsections (3) to (5) are met, the matching shares or rights are treated, for the purposes of section 26AAC , as if they were a continuation of the shares or rights in the old company.

Note:

In determining to what extent something can reasonably be regarded as matching shares or rights in the old company, one of the factors to consider is the respective market values of that thing and of those shares or rights.

26AAD(2) Treating acquisitions as disposals of existing shares etc.  

However, to the extent that, in connection with the takeover or restructure, the taxpayer acquires anything that:

(a) can reasonably be regarded as matching any shares or rights in the old company that the taxpayer had acquired under a scheme for the acquisition of shares by employees; but

(b) is not a matching share or right to which subsection (1) applies;

the taxpayer is treated, for the purposes of section 26AAC , as having disposed of shares, or disposed of rights (other than by exercising them), that the taxpayer held, under a scheme for the acquisition of shares by employees, in the old company immediately before the takeover or restructure.

26AAD(3) Conditions for the continuation of shares or rights.  

The first condition is that, immediately before the takeover or restructure, the taxpayer held shares, or rights to acquire shares, in the old company under a scheme for the acquisition of shares by employees.

26AAD(4)
The second condition is that:

(a) to the extent that the matching shares or rights are shares, they are ordinary shares; or

(b) to the extent that the matching shares or rights are rights, they are rights to acquire ordinary shares.

26AAD(5)
The third condition is that the matching shares or rights are subject to:

(a) the same conditions or restrictions as; or

(b) conditions or restrictions that have the same effect as;

the conditions or restrictions (if any) that attached to the shares or rights in the old company that they can reasonably be regarded as matching.

26AAD(6) Apportionment rules.  

If:

(a) subsection (1) applies to shares or rights that the taxpayer has acquired; and

(b) the taxpayer had paid or given consideration (the original consideration ) for an acquisition, under a scheme for the acquisition of shares by employees, of any of the shares or rights in the old company (the original shares or rights );

the taxpayer is treated as having paid or given, for any of the apportionable assets for the original shares or rights, consideration of an amount worked out by spreading the original consideration proportionately among all the apportionable assets according to their market values immediately after the takeover or restructure.

26AAD(7)
The apportionable assets for the original shares or rights are:

(a) all matching shares or rights held by the taxpayer that are treated because of this section as a continuation of the original shares or rights; and

(b) anything else that the taxpayer acquired in connection with the takeover or restructure and that can reasonably be regarded as matching the original shares or rights; and

(c) in the case of a restructure - any shares or rights in the old company that the taxpayer held immediately before, and continues to hold immediately after, the restructure and that can reasonably be regarded as matching the original shares or rights.

26AAD(8) Definitions.  

In this section:

100% takeover
has the same meaning as in section 139GCB .

conditions or restrictions
, in relation to shares or rights, means conditions or restrictions (if any) relating to:

(a) the shares or rights, or shares acquired as a result of the exercise of the rights; or

(b) the issue or disposal of the shares or rights, or shares acquired as a result of the exercise of the rights.

employee
, in relation to a company, includes a director of the company.

holding company
has the same meaning as in the Corporations Act 2001 .

market value
has the same meaning as in Subdivision F of Division 13A , as that Subdivision applies for the purposes of section 139DS .

Note:

Subsection 139FA(4) alters the meaning of market value of a share or right for the purposes of section 139DS .

restructure
has the same meaning as in section 139GCC .

subsidiary
has the same meaning as in the Corporations Act 2001 .

S 26AAD inserted by No 147 of 2005.