INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 125 - Demerger relief  

Subdivision 125-B - Consequences for owners of interests  

Operative provisions

SECTION 125-65   Meanings of demerger group , head entity and demerger subsidiary  

125-65(1)  
A demerger group comprises the *head entity of the group and one or more *demerger subsidiaries.

Note:

An entity may be a member of one or more demerger groups.

125-65(2)  
A trust cannot be a member of a demerger group unless *CGT event E4 is capable of applying to all of the units and interests in the trust.

Note:

A discretionary trust cannot be a member of a demerger group.

125-65(2A)  


Neither a corporation sole nor a *complying superannuation entity is a member of a *demerger group.

125-65(3)  
A company or trust is the head entity of a *demerger group if no other member of the group owns *ownership interests in the company or trust.

125-65(4)  
If apart from this subsection, a company or trust would be the *head entity of a *demerger group and the company or trust, and all of its *demerger subsidiaries, are also demerger subsidiaries of another company or trust in another demerger group, the first-mentioned company or trust is not the head entity of a demerger group.

125-65(5)  
A company or trust (the first company or trust ) that would, apart from this subsection, be a member of a demerger group is not a member of the demerger group if:


(a) the first company or trust owns, either alone or together with another company or trust that would, apart from this subsection, be a member of the *demerger group, more than 20% but less than 80% of the *ownership interests in a *listed public company or *listed widely held trust; and


(b) the listed public company or listed widely held trust chooses that the first company or trust not be a member of the demerger group.

125-65(6)  
A company is a demerger subsidiary of another company or a trust that is a member of a *demerger group if the other company or the trust, either alone or together with other members of the group, owns, or has the right to *acquire, *ownership interests in the company that carry between them:


(a) the right to receive more than 20% of any distribution of income or capital by the company; or


(b) the right to exercise, or control the exercise of, more than 20% of the voting power of the company.

125-65(7)  
A trust is a demerger subsidiary of another trust or a company that is a member of a *demerger group if the other trust or the company, either alone or together with other members of the group, owns, or has the right to *acquire, *ownership interests in the trust that carry between them the right to receive more than 20% of any distribution of income or capital by the trustee.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.