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-M - Scrip for scrip roll-over  

Operative provisions

SECTION 124-783A   Rights that affect stakes  

124-783A(1)  
An entity has a significant stake in another entity if:


(a) the first entity has one or more *stake options in the other entity; and


(b) the first entity would have such a stake (under section 124-783 ) if the first entity acquired *stake interests in the other entity under any of those stake options.

Note:

Paragraph (b) is satisfied if there are any circumstances (e.g. the first entity exercises some but not all of the stake options) in which the first entity would have a significant stake in the other entity, even if in other circumstances the first entity would not have such a stake.

124-783A(2)  
An entity, or 2 or more entities, have a common stake in the original entity just before the *arrangement started and in the replacement entity just after the arrangement was completed if:


(a) the entities:


(i) had one or more *stake options in the original entity before the arrangement started; or

(ii) have one or more stake options in the replacement entity; and


(b) the entities would have such stakes (under section 124-783 ) if:


(i) the entities had acquired *stake interests in the original entity under any of the stake options mentioned in subparagraph (a)(i); or

(ii) the entities acquired stake interests in the replacement entity under some or all of the stake options mentioned in subparagraph (a)(ii).

124-783A(3)  
Something is a stake option an entity has in another entity if it gives the first entity, or its *associates, a right to acquire the following ( stake interests ):


(a) if the other entity is a company:


(i) voting rights in the company; or

(ii) the right to receive any part of any *dividends that the company may pay; or

(iii) the right to receive any part of any distribution of capital of the company;


(b) if the other entity is a trust - the right to receive any part of any distribution to beneficiaries of the trust of income or capital of the trust;

and the acquisition could occur before the end of 5 years after the *arrangement was completed.

Example 1:

An option.

Example 2:

A share that gives a voting right that is temporarily supressed.

124-783A(4)  
For the purposes of subsection (1), treat the reference in subparagraph (3)(a)(i) to voting rights as being a reference to *shares carrying voting rights.

124-783A(5)  
This section does not limit subsections 124-783(6) to (10) .


 

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.