Income Tax Assessment Act 1936

SCHEDULE 2H - DEMUTUALISATION OF MUTUAL ENTITIES OTHER THAN INSURANCE COMPANIES AND HEALTH INSURERS  

Division 326 - DEMUTUALISATION  

Subdivision 326-E - CGT consequences of disposal of demutualisation shares or interests in such shares by a member of a mutual entity where the entity or a holding company of the entity becomes a company that is not a listed public company  

SECTION 326-150   DISPOSAL BY POST-CGT MEMBER OF A DEMUTUALISATION SHARE (OTHER THAN A DEMUTUALISATION ORIGINAL SHARE) OR AN INTEREST IN SUCH A SHARE  

326-150(1)    
If:

(a) the disposal is a disposal of a demutualisation share (other than a demutualisation original share) or an interest in such a share; and

(b) the disposer is a post-CGT member;

then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the disposer is taken to have done the following:

(c) to have paid for the acquisition of the share or interest both of the following amounts:

(i) the amount worked out by using the formula:

Undeducted membership costs

×

Share or interest             disposed of                         Number of disposer ' s shares

(ii) any amount actually paid for the acquisition;

(d) to have paid the amount referred to in subparagraph (c)(i) on the demutualisation resolution day;

(e) to have paid any amount referred to in subparagraph (c)(ii) when it was actually paid;

(f) to have acquired the share or interest on the demutualisation resolution day.

326-150(2)    
In the formula in subparagraph (1)(c)(i):

number of disposer ' s shares
means the number of demutualisation shares issued to the disposer or in which the disposer had an interest.