ATO Interpretative Decision

ATO ID 2003/1052

Income Tax

Capital gains tax: demergers - superannuation funds choosing rollover
FOI status: may be released

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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Can the trustee of a superannuation fund choose a rollover under section 125-55 of the Income Tax Assessment Act 1997 (ITAA 1997) for a CGT event happening to the fund's original interests under a demerger which satisfies the conditions of Division 125 of ITAA 1997?

Decision

Yes. The trustee of a superannuation fund can choose a rollover under section 125-55 of the ITAA 1997 for a CGT event happening to the fund's original interests under a demerger which satisfies the conditions of Division 125 of the ITAA 1997.

Facts

An Australian resident superannuation fund owned shares in a listed company.

The listed company undertook a demerger of a subsidiary which satisfied the conditions of Division 125 of the ITAA 1997.

This demerger caused a CGT event to happen in relation to the superannuation fund's shares in the listed company.

Reasons for Decision

Paragraph 125-70(1)(g) of the ITAA 1997 prevents a superannuation fund from being a member of a demerger group, but that provision is not relevant as to whether the fund, as an owner of ownership interests in the head entity of the group, is entitled to choose a rollover under section 125-55 of the ITAA 1997.

An entity can choose a rollover under section 125-55 provided that it satisfies the conditions of that section. No condition of that section precludes any particular type of entity from choosing the rollover.

Date of decision: 13 November 2003

Year of income: Year ended 30 June 2003

Legislative References:
Income Tax Assessment Act 1997
   Division 125
   section 125-55
   paragraph 125-70(1)(g)

Keywords
Capital gains tax
CGT roll-over relief
Demerger
Demerger roll-over
Superannuation funds

Business Line: Losses and CGT Centre of Expertise

Date of publication: 21 November 2003

ISSN: 1445-2782

history

	Date:	Version:
You are here	13 November 2003	Original statement
	19 February 2010	Archived

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