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-M - Scrip for scrip roll-over  

Operative provisions

SECTION 124-783A   Rights that affect stakes  

124-783A(1)  
An entity has a significant stake in another entity if:


(a) the first entity has one or more *stake options in the other entity; and


(b) the first entity would have such a stake (under section 124-783 ) if the first entity acquired *stake interests in the other entity under any of those stake options.

Note:

Paragraph (b) is satisfied if there are any circumstances (e.g. the first entity exercises some but not all of the stake options) in which the first entity would have a significant stake in the other entity, even if in other circumstances the first entity would not have such a stake.

124-783A(2)  
An entity, or 2 or more entities, have a common stake in the original entity just before the *arrangement started and in the replacement entity just after the arrangement was completed if:


(a) the entities:


(i) had one or more *stake options in the original entity before the arrangement started; or

(ii) have one or more stake options in the replacement entity; and


(b) the entities would have such stakes (under section 124-783 ) if:


(i) the entities had acquired *stake interests in the original entity under any of the stake options mentioned in subparagraph (a)(i); or

(ii) the entities acquired stake interests in the replacement entity under some or all of the stake options mentioned in subparagraph (a)(ii).

124-783A(3)  
Something is a stake option an entity has in another entity if it gives the first entity, or its *associates, a right to acquire the following ( stake interests ):


(a) if the other entity is a company:


(i) voting rights in the company; or

(ii) the right to receive any part of any *dividends that the company may pay; or

(iii) the right to receive any part of any distribution of capital of the company;


(b) if the other entity is a trust - the right to receive any part of any distribution to beneficiaries of the trust of income or capital of the trust;

and the acquisition could occur before the end of 5 years after the *arrangement was completed.

Example 1:

An option.

Example 2:

A share that gives a voting right that is temporarily supressed.

124-783A(4)  
For the purposes of subsection (1), treat the reference in subparagraph (3)(a)(i) to voting rights as being a reference to *shares carrying voting rights.

124-783A(5)  
This section does not limit subsections 124-783(6) to (10) .


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