Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 713 - Rules for particular kinds of entities  

Subdivision 713-L - Transitional relief for certain transactions relating to life insurance companies  

SECTION 713-505   When this Subdivision applies (first case)  

713-505(1)    
This Subdivision provides for a deferral of the taxation consequences that would occur because of an event (the deferral event ) happening involving an entity (the originating entity ) and another entity (the recipient entity ) if:

(a) the event occurs in connection with a life insurance company (the member life insurance company ) becoming a member of a consolidated group; and

(b) the relevant conditions in section 713-520 are met.

713-505(2)    
If the originating entity is a company, the deferral event referred to in subsection (1) is a CGT event referred to in subsection (4) happening to a CGT asset (the original asset ) where, apart from this Subdivision, the happening of the event would have resulted in:

(a) an amount (other than a capital gain) being included in the originating entity's assessable income; or

(b) the originating entity making a capital gain.

713-505(3)    
If the originating entity is a trust, the deferral event referred to in subsection (1) is a CGT event referred to in subsection (4) happening to a CGT asset (also the original asset ) where, apart from this Subdivision, the happening of the event would have resulted in:

(a) an amount (other than a capital gain) being included in the net income of the trust; or

(b) the trustee making a capital gain.

713-505(4)    
The CGT events are:

(a) CGT events A1, B1, D1, D2, D3, E2, F1 and F2; and

(b) CGT event C2, but only if the CGT asset that ends is a unit in a unit trust that is replaced by an equivalent membership interest (the replacement interest ) in a company or in another trust.