Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 125.65

Meanings of demerger group, head entity and demerger subsidiary

             (1)  A demerger group comprises the * head entity of the group and one or more * demerger subsidiaries.

Note:          An entity may be a member of one or more demerger groups.

             (2)  A trust cannot be a member of a demerger group unless * CGT event E4 is capable of applying to all of the units and interests in the trust.

Note:          A discretionary trust cannot be a member of a demerger group.

          (2A)  Neither a corporation sole nor a * complying superannuation entity is a member of a * demerger group.

             (3)  A company or trust is the head entity of a * demerger group if no other member of the group owns * ownership interests in the company or trust.

             (4)  If apart from this subsection, a company or trust would be the * head entity of a * demerger group and the company or trust, and all of its * demerger subsidiaries, are also demerger subsidiaries of another company or trust in another demerger group, the first-mentioned company or trust is not the head entity of a demerger group.

             (5)  A company or trust (the first company or trust ) that would, apart from this subsection, be a member of a demerger group is not a member of the demerger group if:

                     (a)  the first company or trust owns, either alone or together with another company or trust that would, apart from this subsection, be a member of the * demerger group, more than 20% but less than 80% of the * ownership interests in a * listed public company or * listed widely held trust; and

                     (b)  the listed public company or listed widely held trust chooses that the first company or trust not be a member of the demerger group.

             (6)  A company is a demerger subsidiary of another company or a trust that is a member of a * demerger group if the other company or the trust, either alone or together with other members of the group, owns, or has the right to * acquire, * ownership interests in the company that carry between them:

                     (a)  the right to receive more than 20% of any distribution of income or capital by the company; or

                     (b)  the right to exercise, or control the exercise of, more than 20% of the voting power of the company.

             (7)  A trust is a demerger subsidiary of another trust or a company that is a member of a * demerger group if the other trust or the company, either alone or together with other members of the group, owns, or has the right to * acquire, * ownership interests in the trust that carry between them the right to receive more than 20% of any distribution of income or capital by the trustee.



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