INCOME TAX ASSESSMENT ACT 1936

SCHEDULE 2H - DEMUTUALISATION OF MUTUAL ENTITIES OTHER THAN INSURANCE COMPANIES AND HEALTH INSURERS  

Division 326 - DEMUTUALISATION  

Subdivision 326-D - CGT consequences of disposal of demutualisation shares or an interest in such shares by a member of a mutual entity where the entity or a holding company of the entity becomes a listed public company  

SECTION 326-80   DISPOSAL BY PRE-CGT MEMBER OF A DEMUTUALISATION SHARE (OTHER THAN A DEMUTUALISATION ORIGINAL SHARE) OR AN INTEREST IN SUCH A SHARE BEFORE DEMUTUALISATION LISTING DAY WHERE MEMBER DID NOT ACQUIRE MEMBERSHIP RIGHTS BY DISPOSING OF MEMBERSHIP RIGHTS IN ANOTHER MUTUAL ENTITY  

326-80(1)  
If:


(a) the disposal is a disposal of a demutualisation share (other than a demutualisation original share) or an interest in such a share; and


(b) the disposer did not acquire membership rights in the demutualising entity by disposing of membership rights in another mutual entity; and


(c) the disposer is a pre-CGT member; and


(d) the disposal occurs before the demutualisation listing day;

then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the disposer is taken to have done the following:


(e) to have paid for the acquisition of the share or interest the amount worked out by using the formula:


Adjusted market value   × Share or interest disposed of
  Total number of shares


(f) to have paid that amount on the demutualisation resolution day;


(g) to have acquired the share or interest on the demutualisation resolution day.

326-80(2)  
In the formula in paragraph (1)(e):

total number of shares
means the total number of demutualisation shares issued.


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.