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Edited version of your written advice
Authorisation Number: 1013141335912
Date of advice: 20 December 2016
Ruling
Subject: Subdivision 126-B rollover
Question
Will Foreign Company A qualify for rollover under Subdivision 126-B of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
Facts
Foreign Company A will be selling all the shares it owns in its wholly-owned Australian subsidiary to another Foreign Company B. Foreign Company A will make a capital gain from the sale of the shares. The shares are 'taxable Australian property' within the meaning of section 855-15 of the ITAA 1997.
The Commissioner issued a Private Ruling on the issues requested in the application that Foreign Company A would qualify for the rollover.
Reasons for decision
Both Foreign Company A and Foreign Company B are regarded as members of the same wholly-owned group within the meaning of Subdivision 975-W of the ITAA 1997. There is another foreign entity in the chain of companies that is constituted as a co-operative under the laws of its jurisdiction. The Commissioner having regard to the facts provided by the applicant considered the foreign co-operative to be a 'company' and also that the members of the co-operative own 'shares' in the co-operative/company for the purposes of Subdivision 975-W of the ITAA 1997.