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-A - General rules  

SECTION 124-20   Share and interest sale facilities  

Share and interest sale facilities

124-20(1)    
An entity (the investor ) is treated as owning an *ownership interest (the roll-over interest ) in a company or trust (the issuer ) at a time (the deeming time ), if:

(a) the investor owned an ownership interest (the original interest ) in a company or trust; and

(b) a transaction happened in relation to the original interest; and

(c) because:

(i) a *foreign law impedes the ability of the issuer to issue or transfer the roll-over interest to the investor; or

(ii) it would be impractical or unreasonably onerous to determine whether a foreign law impedes the ability of the issuer to issue or transfer the roll-over interest to the investor;

it is *arranged that the issuer will issue or transfer the roll-over interest to another entity (the facility ) under the transaction instead of to the investor; and

(d) in accordance with that arrangement and as a result of the transaction, the facility:

(i) becomes the owner of the roll-over interest; and

(ii) owns the roll-over interest at the deeming time; and

(e) under the arrangement, the investor is entitled to receive from the facility:

(i) an amount equivalent to the *capital proceeds of any *CGT event that happens in relation to the roll-over interest (less expenses); or

(ii) if a CGT event happens in relation to the roll-over interest together with CGT events happening in relation to other ownership interests - an amount equivalent to the investor ' s proportion of the total capital proceeds of the CGT events (less expenses).

124-20(2)    
The facility is treated as not owning the roll-over interest at the deeming time.

124-20(3)    
This section applies for the purposes of:

(a) applying one of the following provisions (the roll-over provision ) in relation to the transaction:

(i) - (ii) (Repealed by No 133 of 2014)

(iii) Subdivision 124-I (Change of incorporation);

(iv) Subdivision 124-N (Disposal of assets by a trust to a company);

(v) Subdivision 124-Q (Exchange of stapled ownership interests for ownership interests in a unit trust);

(vi) Division 615 (Roll-overs for business restructures); and

(b) the following provisions, to the extent that they relate to a roll-over under the roll-over provision that involves the transaction:

(i) item 2 of the table in subsection 115-30(1) ;

(ii) sections 124-10 and 124-15 .

Incorporated bodies

124-20(4)    
Without limiting this section, it also has effect, in a case covered by subparagraph (3)(a)(iii) (about Subdivision 124-I ), as if each reference in this section to an *ownership interest in a company or trust were a reference to:

(a) an interest in an incorporated body; and

(b) any rights relating to the body owned by the entity that owns that interest.

124-20(5)    
This section applies, in a case covered by subparagraph (3)(a)(iii) (about Subdivision 124-I ), in relation to rights as a *member of a company incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 in the same way as it applies in relation to *shares in a company.