Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS

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Division 124 - Replacement-asset roll-overs

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Subdivision 124-I - Change of incorporation

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History

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Subdiv 124-I substituted by No 12 of 2012, s 3 and Sch 2 item 15, effective 21 March 2012. Subdiv 124-I formerly read:

Subdivision 124-I - Conversion of a body to an incorporated company
SECTION 124-520 Conversion of a body to an incorporated company
124-520(1)
You can choose to obtain a roll-over if:

(a) you are a member of a body that is incorporated under a law (other than the Corporations Act 2001 or a similar *foreign law relating to companies); and

(b) the body is converted into a company incorporated under the Corporations Act 2001 or a similar foreign law relating to companies (without creating a new legal entity); and

(c) the company issues you with *shares (and you receive nothing else) in substitution for your interest in the body just before the conversion; and

(d) there is no significant difference in:

(i) the ownership of the body just before the conversion and the ownership of the company just after the conversion; or

(ii) the mix of ownership of the body just before the conversion and the mix of ownership of the company just after the conversion; and

(e) this requirement is satisfied:

(i) you are an Australian resident at the time of the conversion; or

(ii) if you are a foreign resident at that time - your interest in the body was *taxable Australian property just before that time and the *shares are taxable Australian property when they are issued.

Note 1:

The roll-over consequences are set out in Subdivision 124-A . The original asset is your interest in the body. The new asset is your shares in the company.

Note 2:

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

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History

S 124-520(1) amended by No 168 of 2006 , s 3 and Sch 4 item 58, by substituting " was *taxable Australian property just before that time and the *shares are taxable Australian property when they are issued " for " has the *necessary connection with Australia " in para (e)(ii), applicable to CGT events that happen on or after 12 December 2006.

S 124-520(1) amended by No 41 of 2005.

124-520(2)
This section does not apply if the body is a mutual entity that is being demutualised and to whose demutualisation Division 326 in Schedule 2H of the Income Tax Assessment Act 1936 applies.
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History

S 124-520(2) amended by No 58 of 2006 , s 3 and Sch 7 item 77, by inserting " in Schedule 2H " after " Division 326 " , effective 22 June 2006.

S 124-520(3) renumbered as s 124-520(2) by No 41 of 2005.

S 124-520(2) repealed by No 41 of 2005 and amended by No 55 of 2001.

S 124-520(3) inserted by No 103 of 1999.

S 124-520 inserted by No 46 of 1998.

Special consequences of some roll-overs

SECTION 124-530 Shares in company replacing pre-CGT and post-CGT mix of interest and rights in body

124-530(1)
This section applies if:

(a) you choose to obtain a roll-over under section 124-520 or 124-525 relating to *shares you have in the company on account of the following (your original assets ):

(i) your interest in the body mentioned in that section;

(ii) your other rights relating to the body mentioned in that section; and

(b) you *acquired some of your original assets before 20 September 1985 and the rest of them on or after that day.

124-530(2)
You are taken to have *acquired so many of the *shares before 20 September 1985 as is reasonable, having regard to:

(a) the number and *market value of your original assets; and

(b) the number and market value of the shares.

124-530(3)
The first element of the *cost base of each of the *shares not taken by subsection (2) to have been *acquired before 20 September 1985 (your post-CGT shares ) is such amount as is reasonable having regard to:

(a) the total of the cost bases of your original assets that you acquired on or after 20 September 1985; and

(b) the number and *market value of your post-CGT shares.

124-530(4)
The reduced cost base of each of your post-CGT shares is worked out similarly.

124-530(5)
This section has effect despite subsections 124-15(5) and (6) .

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