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INCOME TAX ASSESSMENT ACT 1997 - SECT 122.135

Other requirements to be satisfied

  (1)   The partners must own all the * shares in the company just after the time of the trigger event.

  (2)   Each partner must own the * shares the partner received for the trigger event happening in the same capacity that the partner:

  (a)   owned the partner's interests in the assets that the company now owns; or

  (b)   participated in the creation of the asset in the company.

Note:   If a partner's interests were owned as trustee, the partner must receive shares as trustee.

  (3)   This Subdivision does not apply to the * disposal or creation of any of the assets specified in this table:

 

Assets to which Subdivision does not apply

Item

In this situation:

This Subdivision does not apply to:

1

The partners * dispose of their interests in a * CGT asset to, or create a CGT asset in, the company

(a)   a * collectable or a * personal use asset; or

(b)   a decoration awarded for valour or brave conduct (except if a partner paid money or gave any other property for it); or

(c)   a * precluded asset; or

(d)   an asset that becomes * trading stock of the company just after the * disposal or creation

2

The partners * dispose of their interests in all the assets of a business

(a)   a * collectable or a * personal use asset; or

(b)   a decoration awarded for valour or brave conduct (except if a partner paid money or gave any other property for it); or

(c)   an asset that becomes * trading stock of the company just after the disposal or creation (unless it was trading stock of the partnership when it was disposed of)

  (4)   If:

  (a)   the * CGT asset or any of the assets of the * business is a right, option, * convertible interest or * exchangeable interest; and

  (b)   the company * acquires another CGT asset by exercising the right or option or by converting the convertible interest or in exchange for the disposal or redemption of the exchangeable interest;

the other asset cannot become * trading stock of the company just after the company acquired it.

  (5)   The * ordinary income and * statutory income of the company must not be exempt from income tax because it is an * exempt entity for the income year of the trigger event.

  (6)   For a partner who is not a trustee of a trust at the time of the trigger event, either:

  (a)   the partner and the company must both be Australian residents at that time; or

  (b)   both of the following requirements must be satisfied:

  (i)   each asset must be * taxable Australian property at that time; and

  (ii)   the shares in the company mentioned in subsection   122 - 130(1) must be taxable Australian property just after that time.

  (7)   For a partner who is a trustee of a trust at the time of the trigger event, either:

  (a)   at that time, the trust must be a * resident trust for CGT purposes and the company must be an Australian resident; or

  (b)   both of the following requirements must be satisfied:

  (i)   each * CGT asset must be a CGT asset of the trust that is * taxable Australian property at that time; and

  (ii)   the shares in the company mentioned in subsection   122 - 130(1) must be taxable Australian property just after that time.


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