Income Tax Assessment Act 1997
There is a roll-over if:
(a) an entity (also the original interest holder ) exchanges:
(i) a unit or other interest (also the holder ' s original interest ) in a trust (also the original entity ) for a unit or other interest (also the holder ' s replacement interest ) in another trust (also the acquiring entity and the replacement entity ); or
(ii) an option, right or similar interest (also the holder ' s original interest ) issued by the original entity that gives the holder an entitlement to acquire a unit or other interest in the original entity for a similar interest (also the holder ' s replacement interest ) in another trust (also the acquiring entity and the replacement entity ); and
(b) entities have *fixed entitlements to all of the income and capital of the original entity and the acquiring entity; and
(c) the exchange is in consequence of an *arrangement that satisfies subsection (2) or (2A); and
(d) the conditions in subsections (3) and (4) are satisfied.
There are some exceptions: see section 124-795 .
The original interest holder can obtain only a partial roll-over if the capital proceeds for its original interest include something other than its replacement interest: see section 124-790 .
The *arrangement must:
(a) result in the acquiring entity owning 80% or more of the *trust voting interests in the original entity or, if there are none, 80% or more of the units or other interests in the original entity; and
(b) be one in which at least all owners of trust voting interests (or of units or other interests) in the original entity (except the acquiring entity) could participate; and
(c) be one in which participation was available on substantially the same terms for all of the owners of interests or units of a particular type in the original entity. Conditions for arrangement - takeover bids 124-781(2A)
The *arrangement must:
(a) satisfy paragraph (2)(a); and
(b) be, be part of, or include a takeover bid (within the meaning of the Corporations Act 2001 ) for the original interests by the acquiring entity that is not carried out in contravention of the provisions mentioned in paragraphs 612(a) to (g) of that Act.
For exemption and modification of provisions by ASIC (and review by the takeovers panel) see Part 6.10 of the Corporations Act 2001 . For Court declarations excusing contraventions see section 1325D of that Act.
The conditions are:
(a) the original interest holder *acquired its original interest on or after 20 September 1985; and
(b) apart from the roll-over, it would make a *capital gain from a *CGT event happening in relation to its original interest; and
(c) it chooses to obtain the roll-over or, if section 124-782 applies to it for the *arrangement, it and the trustee of the acquiring entity jointly choose to obtain the roll-over; and
(d) if that section applies to it, it informs that trustee in writing of the *cost base of its original interest as at the time just before a CGT event happened in relation to it.
If the original interest holder also exchanges a CGT asset that it acquired before 20 September 1985, the cost base of any interest received in exchange for it is worked out under section 124-800 .Further roll-over conditions in certain cases 124-781(4)
These conditions must be satisfied if the original interest holder and the trustee of the acquiring entity did not deal with each other at *arm ' s length and neither the original entity nor the acquiring entity had at least 300 beneficiaries just before the *arrangement started:
(a) the *market value of the original interest holder ' s *capital proceeds for the exchange is at least substantially the same as the market value of its original interest; and
(b) its replacement interest carries the same kind of rights and obligations as those attached to its original interest.
There are some cases where a trust will not be regarded as having 300 beneficiaries: see section 124-810 .CUFS 124-781(5)
This section applies to the holder of a Chess Unit of Foreign Security as if the holder held the underlying interests that the unit represents.
A Chess Unit of Foreign Security is an interest, traded on the stock market operated by ASX Limited, in a foreign share, unit or interest.
A trust voting interest in a trust is an interest in the trust that confers rights of the same or a similar kind as the rights conferred by a *voting share in a company.
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