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Edited version of private ruling
Authorisation Number: 1011663929372
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Ruling
Issue 1
Question 1
On completion of the acquisition of shares in A by B, does B remain eligible to be the head company of the B consolidated group and is A eligible to be subsidiary member of the B consolidated group for the purposes of Division 703 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Advice/Answers
Yes.
Question 2
Will the sale of the B shares to the institutional investors give rise to a capital gain or capital loss under section 104-10 (CGT event A1), section 104-35 (CGT event D1) or section 104-155 (CGT event H2) of the ITAA 1997, or assessable income under section 6-5 of the ITAA 1997 or an allowable deduction under section 8-1 of the ITAA 1997, in the hands of B?
Advice/Answers
No.
Question 3
Is BL entitled to deduct expenditure incurred in relation to the sale of the B shares to the institutional investors (such as underwriting and advisor fees) under section 40-880 of the ITAA 1997?
Advice/Answers
Yes.
Question 4
Does Part IVA apply to B and A in entering into the proposed transaction?
Advice/Answers
No.
This ruling applies for the following period
1 July 2010 to 30 June 2011
The scheme commenced on
In the income year ending 30 June 2011
Relevant facts and circumstances
The Commissioner ruled on the facts provided in the ruling request.