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INCOME TAX ASSESSMENT ACT 1997 - SECT 125.235

Share and interest sale facilities

Share and interest sale facilities

             (1)  An entity (the investor ) is treated as owning an * ownership interest (the roll-over interest ) in a * demerged entity at a time (the deeming time ), if:

                     (a)  the investor owned an ownership interest in a company or trust that was the * head entity of a * demerger group; and

                     (b)  a * demerger happens to the demerger group; and

                     (c)  because:

                              (i)  a * foreign law impedes the ability of a member of the demerger group to issue or transfer the roll-over interest to the investor; or

                             (ii)  it would be impractical or unreasonably onerous to determine whether a foreign law impedes the ability of a member of the demerger group to issue or transfer the roll-over interest to the investor;

                            it is * arranged that the member will issue or transfer the roll-over interest to another entity (the facility ) under the demerger instead of to the investor; and

                     (d)  in accordance with that arrangement and as a result of the demerger, the facility:

                              (i)  becomes the owner of the roll-over interest (which is a new or replacement interest in the demerged entity); and

                             (ii)  owns the roll-over interest at the deeming time; and

                     (e)  under the arrangement, the investor is entitled to receive from the facility:

                              (i)  an amount equivalent to the * capital proceeds of any * CGT event that happens in relation to the roll-over interest (less expenses); or

                             (ii)  if a CGT event happens in relation to the roll-over interest together with CGT events happening in relation to other ownership interests--an amount equivalent to the investor's proportion of the total capital proceeds of the CGT events (less expenses).

             (2)  The facility is treated as not owning the roll-over interest at the deeming time.

             (3)  This section applies for the purposes of:

                     (a)  applying this Division in relation to the demerger; and

                     (b)  item 2 of the table in subsection 115-30(1), to the extent that it relates to a roll-over under this Division that involves the demerger.

Table of Subdivisions

             Guide to Division 126

126-A   Marriage or relationship breakdowns

126-B    Companies in the same wholly-owned group

126-C    Changes to trust deeds

126-D   Small superannuation funds

126-E    Entitlement to shares after demutualisation and scrip for scrip roll-over

126-G   Transfer of assets between certain trusts

Guide to Division 126



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