Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 (101 of 2006)

Schedule 2   Consequential amendments relating to Schedule 1 repeals etc.

Part 1   Amendments: general

Income Tax Assessment Act 1936

560   Section 326-190 in Schedule 2H

Repeal the section, substitute:

326-190 Extinguishment of right to shares in demutualised entity by the issue of the shares

(1) If, under the direct method of demutualisation or the holding company method of demutualisation, shares in a demutualised entity are issued to an existing member, Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 do not apply in respect of any CGT event constituted by the extinguishment of the member's right to have the shares issued to the member.

(2) If, under the combined direct and holding company method of demutualisation, shares in a demutualised entity or in a holding company are issued to an existing member, Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 do not apply in respect of any CGT event constituted by the extinguishment of the member's rights to have the shares issued to the member.