Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 124 - Replacement-asset roll-overs  

Subdivision 124-Q - Exchange of stapled ownership interests for ownership interests in a unit trust  

Operative provisions

SECTION 124-1055   Consequences of the roll-over for exchanging members  

124-1055(1)    
A *capital gain or *capital loss you make as a result of the *scheme from each of your *ownership interests is disregarded.

124-1055(2)    
If you *acquired all of your *ownership interests in the *stapled entities on or after 20 September 1985, the first element of the *cost base and *reduced cost base of each of your ownership interests in the interposed trust is such amount as is reasonable having regard to:

(a) the total of the *cost bases of all of your ownership interests in the *stapled entities; and

(b) the number, *market value and character of your ownership interests in the interposed trust.

Example:

Naomi had a cost base of $2.00 for each of her 200 Public Company A shares, $1.50 for each of her 200 Unit Trust No 1 units and $0.50 for each of her 200 Unit Trust No 2 units. The total of the cost bases of all of her membership interests is $800.00.

It is reasonable to allocate $8.00 to each of the 100 units in the interposed trust that she receives under the reorganisation.

124-1055(3)    
If you *acquired all of your *ownership interests in the *stapled entities before 20 September 1985, you are taken to have acquired all of your ownership interests in the interposed trust before that day.

124-1055(4)    
If you *acquired some of your *ownership interests in the *stapled entities before 20 September 1985, you are taken to have acquired so many of your ownership interests in the interposed trust as is reasonable before that day having regard to:

(a) the number, *market value and character of your ownership interests in the stapled entities; and

(b) the number, market value and character of your ownership interests in the interposed trust.

Note:

Generally, a capital gain or capital loss from a CGT asset acquired before 20 September 1985 can be disregarded: see Division 104.

124-1055(5)    
The first element of the *cost base and *reduced cost base of each of your *ownership interests in the interposed trust that is not taken by subsection (4) to have been *acquired before 20 September 1985 (your post-CGT interests ) is such amount as is reasonable having regard to:

(a) the total of the cost bases of your ownership interests in the *stapled entities that you acquired on or after 20 September 1985; and

(b) the number, *market value and character of your post-CGT interests.