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-P - Exchange of a membership interest in an MDO for a membership interest in another MDO  

Operative provisions

SECTION 124-980   Exchange of membership interests in an MDO  

124-980(1)    
There is a roll-over if:

(a) an entity exchanges:

(i) an interest (the original interest ) in an *MDO (the original MDO ) as a member of the original MDO; for

(ii) a similar interest (the replacement interest ) in another MDO (the new MDO ) as a member of the new MDO; and

(b) both the original MDO and the new MDO are companies limited by guarantee; and

(c) the exchange is in consequence of a single *arrangement that satisfies subsection (3); and

(d) apart from the roll-over, the entity would make a *capital gain from a *CGT event happening in relation to its original interest; and

(e) the entity chooses to obtain the roll-over; and

(f) the entity acquired the original interest on or after 20 September 1985.

Note:

The entity can obtain only a partial roll-over if the capital proceeds for its original interest include something other than its replacement interest: see section 124-990 .

124-980(2)    
In working out whether an original interest is exchanged for a similar interest, disregard a difference that consists only of a right to receive distributions of income or capital.

Conditions for arrangement

124-980(3)    
The *arrangement must:

(a) result in the new *MDO becoming the sole *member of the original MDO; and

(b) be one in which participation was available on substantially the same terms for all of the holders of interests as members of the original MDO of a particular type.