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INCOME TAX ASSESSMENT ACT 1997 - SECT 124.980

Exchange of membership interests in an MDO

  (1)   There is a roll - over if:

  (a)   an entity exchanges:

  (i)   an interest (the original interest ) in an * MDO (the original MDO ) as a member of the original MDO; for

  (ii)   a similar interest (the replacement interest ) in another MDO (the new MDO ) as a member of the new MDO; and

  (b)   both the original MDO and the new MDO are companies limited by guarantee; and

  (c)   the exchange is in consequence of a single * arrangement that satisfies subsection   (3); and

  (d)   apart from the roll - over, the entity would make a * capital gain from a * CGT event happening in relation to its original interest; and

  (e)   the entity chooses to obtain the roll - over; and

  (f)   the entity acquired the original interest on or after 20   September 1985.

Note:   The entity can obtain only a partial roll - over if the capital proceeds for its original interest include something other than its replacement interest: see section   124 - 990.

  (2)   In working out whether an original interest is exchanged for a similar interest, disregard a difference that consists only of a right to receive distributions of income or capital.

Conditions for arrangement

  (3)   The * arrangement must:

  (a)   result in the new * MDO becoming the sole * member of the original MDO; and

  (b)   be one in which participation was available on substantially the same terms for all of the holders of interests as members of the original MDO of a particular type.


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