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  

Old corporation wound up

SECTION 124-525   Old corporation wound up  

124-525(1)  
This section applies if:


(a) a body is incorporated under a law described in column 1 of an item of the table; and


(b) a company is incorporated under a law described in column 2 of the item; and


(c) the body ceases to exist, but the company continues to exist, after the time (the switch time ) the *members of the body receive *shares in the company, or rights as members of it if it is incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 , on account of:


(i) their interests in the body; and

(ii) their other rights (if any) relating to the body; and


(d) the members of the body do not receive anything else on account of the expected ending of those interests and rights; and


(e) 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 switch time and the ownership of the company just after the switch time; 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 switch time and the mix of ownership of the company just after the switch time; and
Note:

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


(f) the body *disposes of all its *CGT assets to the company, except any assets expected to be needed to meet the body ' s existing or expected liabilities before it ceases to exist.


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

124-525(2)  
You can choose to obtain a roll-over if:


(a) you were a *member of the body just before the switch time; and


(b) your ownership of your interest in the body ends at a time (the end time ) after the switch time; and


(c) at the end time you have the *shares in the company that you received at the switch time; and


(d) either you are an Australian resident at the end time or, if you are a foreign resident at the end time:


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

(ii) the shares in the company that you received at the switch time are taxable Australian property at the end time.
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.

124-525(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 .


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