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-I - Change of incorporation  

Change of incorporation without change of entity

SECTION 124-520   Change of incorporation without change of entity  

124-520(1)  


This section applies if:


(a) you are a *member of a body incorporated under a law described in column 1 of an item of the table; and


(b) the body is converted into a company incorporated under a law described in column 2 of the item, without creating a new legal entity; and


(c) it is reasonable to conclude that there is no significant difference:


(i) between the ownership of the body, and of rights relating to the body held by entities that owned the body, just before the conversion and the ownership of the company just after the conversion; or

(ii) between the mix of ownership of the body, and of rights relating to the body held by entities that owned the body, just before the conversion and the mix of ownership of the company just after the conversion.
Note:

See section 124-20 if an entity uses a share or interest sale facility.


Laws the body and company are incorporated under
Column 1
Body incorporated under this law
Column 2
Company incorporated under this law
1 A law other than the Corporations Act 2001 and a similar *foreign law relating to companies The Corporations Act 2001 or a similar foreign law relating to companies
2 A law other than the Corporations (Aboriginal and Torres Strait Islander) Act 2006 The Corporations (Aboriginal and Torres Strait Islander) Act 2006

124-520(2)  


You can choose to obtain a roll-over if:


(a) as a result of the conversion you are issued with *shares in the company and you receive nothing else; and


(b) either you are an Australian resident at the time of the conversion or, if you are a foreign resident at that time:


(i) each of your interest and your other rights (if any) relating to the body was *taxable Australian property just before that time; and

(ii) the shares are taxable Australian property when they are issued.
Note 1:

The roll-over consequences are set out in Subdivision 124-A and section 124-530 .

Note 2:

Section 103-25 tells you when you have to make the choice.

124-520(3)  


If the company is incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 , subsection (2) applies in relation to rights as a *member of the company in the same way as that subsection applies to *shares in a company.
Note:

This may allow you to choose to obtain a roll-over. The roll-over consequences are set out in Subdivision 124-A and section 124-535 .

Exception for demutualisation of certain bodies

124-520(4)  
This section does not apply to demutualisation of a body if Division 326 in Schedule 2H to the Income Tax Assessment Act 1936 applies to the demutualisation.

Note:

That Division deals with demutualisation of entities other than insurance companies and health insurers.


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