Income Tax Assessment Act 1997
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Hide history noteSECTION 124-1050 Conditions 124-1050(1)
Just after the *scheme is completed (the completion time ), each exchanging member must own a percentage of the *ownership interests in the interposed trust that reasonably equates to the percentage of the ownership interests that the member owned in the *stapled entities.
Example:
Public Company A, Unit Trust No 1 and Unit Trust No 2 are stapled entities. Each stapled entity has 4,000 ownership interests on issue. There are no ownership interests in any of the stapled entities other than shares in the company and units in the trusts.
Under a scheme for reorganising the stapled entities, Unit Trust No 3 is interposed between the stapled entities and the owners of the interests in those entities. Unit Trust No 3 (the interposed trust) becomes the owner of all of the interests in each of the three stapled entities. Exchanging members receive one unit in the interposed trust for each stapled security they owned. All units in the interposed trust are of the same class.
Naomi owned 200 shares in Public Company A, 200 units in Unit Trust No 1 and 200 units in Unit Trust No 2. Naomi therefore owned 5% of the ownership interests in each of the stapled entities. Under the scheme, Naomi receives 100 units in Unit Trust No 3 (out of a total of 2,000 units) in exchange for her ownership interests in the stapled entities. Naomi now owns 5% of the ownership interests in the interposed trust and meets the condition in subsection (1).
124-1050(2)
Just after the completion time, each exchanging member must have the same, or as nearly as practicable the same, proportionate *market value of *ownership interests in the interposed trust as the member had in the *stapled entities just before that time.
124-1050(3)
In working out whether an exchanging member complies with subsection (2), an anticipated reasonable approximation of the *market value of *ownership interests just after the completion time is sufficient.
Note:
An anticipated reasonable approximation of market values of ownership interests may include valuations provided to exchanging members in scheme documents.
124-1050(4)
You must be an Australian resident at the completion time or, if you are a foreign resident at that time:
(a) some or all of your *ownership interests in the *stapled entities must have been *taxable Australian property just before that time; and
(b) your ownership interests in the interposed trust must be taxable Australian property just after that time.
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