Income Tax Assessment Act 1997



Division 125 - Demerger relief  

Subdivision 125-B - Consequences for owners of interests  

Operative provisions

SECTION 125-60   Meaning of ownership interest and related terms  

An ownership interest in a company or trust is:

(a) for a company, a *share in the company or an option, right or similar interest issued by the company that gives the owner an entitlement to *acquire a share in the company; and

(b) for a trust, a unit or other interest in the trust or an option, right or similar interest issued by the trustee that gives the owner an entitlement to acquire a unit or other interest in the trust.


However, this Subdivision applies to a *dual listed company voting share in a company that is the *head entity of a *demerger group as if it were not an ownership interest if there are not more than 5 of those *shares in the company.

A dual listed company voting share is a *share in a company:

(a) issued:

(i) (Repealed by No 147 of 2005)

(ii) as part of a *dual listed company arrangement; and

(iii) mainly for the purpose of ensuring that shareholders of both companies involved in the arrangement vote as a single decision-making body on matters affecting them; and

(b) that does not carry rights to financial entitlements (except the return of the amount paid up on the share and a dividend that is the equivalent of a dividend paid on an ordinary share).

A dual listed company arrangement is an *arrangement under which 2 publicly listed companies, while maintaining their separate legal entity status, shareholdings and listings, align their strategic directions and the economic interests of their respective shareholders through:

(a) the appointment of common (or almost identical) boards of directors, except where the effect of the relevant regulatory requirements prevents this; and

(b) management of the operations of the 2 companies on a unified basis; and

(c) the shareholders of both companies voting in effect as a single decision-making body on substantial issues affecting their combined interests; and

(d) equalised distributions to shareholders in accordance with an equalisation ratio applying between the 2 companies, both generally and in the event of a winding up of one or both of the companies; and

(e) cross-guarantees as to, or similar financial support for, each other ' s substantial obligations or operations, except where the effect of the relevant regulatory requirements prevents those guarantees or that financial support.

However, an arrangement is not a dual listed company arrangement unless one but not both of the companies is an Australian resident.


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