Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

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

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Division 124 - Replacement-asset roll-overs

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Subdivision 124-I - Change of incorporation

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History

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Subdiv 124-I substituted by No 12 of 2012, s 3 and Sch 2 item 15, effective 21 March 2012. Subdiv 124-I formerly read:

Subdivision 124-I - Conversion of a body to an incorporated company
SECTION 124-520 Conversion of a body to an incorporated company
124-520(1)
You can choose to obtain a roll-over if:

(a) you are a member of a body that is incorporated under a law (other than the Corporations Act 2001 or a similar *foreign law relating to companies); and

(b) the body is converted into a company incorporated under the Corporations Act 2001 or a similar foreign law relating to companies (without creating a new legal entity); and

(c) the company issues you with *shares (and you receive nothing else) in substitution for your interest in the body just before the conversion; and

(d) there is no significant difference in:

(i) the ownership of the body just before the conversion and the ownership of the company just after the conversion; or

(ii) the mix of ownership of the body just before the conversion and the mix of ownership of the company just after the conversion; and

(e) this requirement is satisfied:

(i) you are an Australian resident at the time of the conversion; or

(ii) if you are a foreign resident at that time - your interest in the body was *taxable Australian property just before that time and the *shares are taxable Australian property when they are issued.

Note 1:

The roll-over consequences are set out in Subdivision 124-A . The original asset is your interest in the body. The new asset is your shares in the company.

Note 2:

Section 103-25 tells you when you have to make the choice.

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History

S 124-520(1) amended by No 168 of 2006 , s 3 and Sch 4 item 58, by substituting " was *taxable Australian property just before that time and the *shares are taxable Australian property when they are issued " for " has the *necessary connection with Australia " in para (e)(ii), applicable to CGT events that happen on or after 12 December 2006.

S 124-520(1) amended by No 41 of 2005.

124-520(2)
This section does not apply if the body is a mutual entity that is being demutualised and to whose demutualisation Division 326 in Schedule 2H of the Income Tax Assessment Act 1936 applies.
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History

S 124-520(2) amended by No 58 of 2006 , s 3 and Sch 7 item 77, by inserting " in Schedule 2H " after " Division 326 " , effective 22 June 2006.

S 124-520(3) renumbered as s 124-520(2) by No 41 of 2005.

S 124-520(2) repealed by No 41 of 2005 and amended by No 55 of 2001.

S 124-520(3) inserted by No 103 of 1999.

S 124-520 inserted by No 46 of 1998.

Old corporation wound up

SECTION 124-525 Old corporation wound up

124-525(1)
This section applies if:

(a) a body is incorporated under a law described in column 1 of an item of the table; and

(b) a company is incorporated under a law described in column 2 of the item; and

(c) the body ceases to exist, but the company continues to exist, after the time (the switch time ) the *members of the body receive *shares in the company, or rights as members of it if it is incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 , on account of:

(i) their interests in the body; and

(ii) their other rights (if any) relating to the body; and

(d) the members of the body do not receive anything else on account of the expected ending of those interests and rights; and

(e) it is reasonable to conclude that there is no significant difference:

(i) between the ownership of the body, and of rights relating to the body held by entities that owned the body, just before the switch time and the ownership of the company just after the switch time; or

(ii) between the mix of ownership of the body, and of rights relating to the body held by entities that owned the body, just before the switch time and the mix of ownership of the company just after the switch time; and

Note:

See section 124-20 if an entity uses a share or interest sale facility.

(f) the body *disposes of all its *CGT assets to the company, except any assets expected to be needed to meet the body ' s existing or expected liabilities before it ceases to exist.

Laws the body and company are incorporated under
	Column 1 Body incorporated under this law	Column 2 Company incorporated under this law
1	A law other than the Corporations Act 2001 and a similar *foreign law relating to companies	The Corporations Act 2001 or a similar foreign law relating to companies
2	A law other than the Corporations (Aboriginal and Torres Strait Islander) Act 2006	The Corporations (Aboriginal and Torres Strait Islander) Act 2006

124-525(2)
You can choose to obtain a roll-over if:

(a) you were a *member of the body just before the switch time; and

(b) your ownership of your interest in the body ends at a time (the end time ) after the switch time; and

(c) at the end time you have the *shares in the company that you received at the switch time; and

(d) either you are an Australian resident at the end time or, if you are a foreign resident at the end time:

(i) each of your interest in the body and your other rights (if any) relating to the body was *taxable Australian property just before the end time; and

(ii) the shares in the company that you received at the switch time are taxable Australian property at the end time.

Note 1:

The roll-over consequences are set out in Subdivision 124-A and section 124-530 .

Note 2:

Section 103-25 tells you when you have to make the choice.

124-525(3)
If the company is incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 , subsection (2) applies in relation to rights as a *member of the company in the same way as that subsection applies to *shares in a company.

Note:

This may allow you to choose to obtain a roll-over. The roll-over consequences are set out in Subdivision 124-A and section 124-535 .

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