Private ruling: Division 615 business restructure roll-overs
Date of advice: 11 November 2025
Published: 5 January 2026
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: XX/XX/20XX

Ruling: Q1: Can the Shareholders of Company A rely on the roll-over contained in Division 615 to disregard any capital gain arising upon the disposal of their original interests in Company A, in exchange for shares in HoldCo (and nothing else), under a scheme to restructure Company A (the Scheme)? | A1: Yes

Relevant facts and circumstances: 1. Company A is an Australian private company that was incorporated on XX/XX/19XX. 2. Company A is the head company of an income tax consolidated group (ITCG) that was formed on XX/XX/20XX. The ITCG consists of XX wholly own subsidiary companies. Company A is the main trading entity for the AAA Group. 3. The current AAA Group also includes Company B. This company was incorporated in XX 20XX and provides shared services the AAA Group. 4. At the time of ITCG's formation in 20XX, Company B was ineligible to the member of the ITCG. 5. Company A currently has XXXXX ordinary shares on issue, held by XX different Shareholders. 6. All Shareholders in Company A are Australian tax residents for income tax purposes. The Proposed Restructure 7. The AAA Group is transitioning to an unlisted public company. In this regard, the AAA Group is proposing to undergo a corporate restructure. 8. AAA Group operates a large national business and is progressing its objective of becoming a public unlisted entity, driven by its growing revenue and shareholder base. This transition supports the simplification of its corporate structure and compliance obligations across reporting, accounting, taxation, and administration. As part of this transition, AAA Group has been consolidating operations into a single trading entity such that contracts and transactions in the regional entities are being phased out as they are completed and all employment contracts transferred to Company B, streamlining internal finance, audit, and management processes. 9. Company A (and Company B) meets the criteria for unlisted public company status and requires a restructure to meet its transformation objectives. The proposed restructure facilitates AAA Group's shift from private to public, enabling operational efficiencies and reducing compliance complexity. 10. In contemplating the Proposed Restructure, Company B will become a wholly owned subsidiary of the new unlisted public holding company, allowing for the consolidation of 2 independent shareholder registers. The Schemes to Restructure the Companies 11. The schemes to restructure the companies consist of 4 steps. • Step 1 involves the incorporation of a new unlisted public Australian holding company. • Step 2 involves obtaining Shareholder approval for the proposed HoldCo Constitution. • Step 3 involves the disposal of the Shareholders' interests in Company A to HoldCo in return for shares in HoldCo (and nothing else) under the First Scheme . • Step 4 involves the disposal of the Shareholders' interests in Company B to HoldCo in return for shares in HoldCo (and nothing else) under the Second Scheme . This step will occur one day after the First Scheme. 12. Under Step 1, HoldCo was incorporated with one ordinary $1.00 share (incorporation share) on XX/XX/20XX. 13. The First Scheme will be executed simultaneously with the cancellation of the incorporation share in HoldCo. 14. There are no rights or powers attached to the incorporation share that give rise to any entitlement or attachment to a replacement share in HoldCo to be issued as part of the First or Second Scheme. 15. HoldCo has not yet commenced any operations, and it holds no assets or has not incurs any liabilities. HoldCo will continue to have no material value until receipt of the shares in Company A and Company B (in exchange for issuing shares in HoldCo to the Shareholders in accordance with the Share Exchange Deeds). 16. The consideration received by the Shareholders for the First Scheme will be shares in HoldCo (and nothing else), with the market value of those shares equal to the market value of shares held in Company A just prior to the First Scheme. 17. The market value of a share in Company A as at 30 June 20XX was $XXX. 18. The consideration received by the Shareholders for the Second Scheme will be shares in HoldCo (and nothing else), with the market value of those shares equal to the market value of shares held in Company B just prior to the Second Scheme. The market value of shares in Company B does not vary. As a service entity exclusively to the AAA Group, Company B does not increase its capital value. The value of a share in Company B is fixed at $XXX. First Scheme 19. The HoldCo and Company A Share Exchange Deed (Deed One) governs the implementation of the First Scheme, the completion of which is conditional on the simultaneous transfer of all other shares in Company A to HoldCo. 20. On the date of the First Scheme (the Completion Date), the Shareholders will transfer all of their shares in Company A to HoldCo in return for shares in HoldCo (and nothing else). For every Company A share transferred, the Shareholders will be issued one HoldCo share. 21. As the exchange ratio of Company A shares for HoldCo shares are one for one, the Shareholders will hold the same percentage of total issued HoldCo shares as the percentage of total issued Company A shares, they held prior to the First Scheme. 22. The ratio of the market value of the HoldCo shares held by the Shareholders to the total market value of the shares in HoldCo will be the same as the ratio of the market value of the Company A shares transferred by the Shareholders to the total market value of shares in ACOR Consultants. 23. Each HoldCo share issued under Deed One for the First Scheme will carry the same rights and restrictions as each Company A share transferred to HoldCo by the Shareholders. 24. Immediately following the First Scheme, HoldCo will become the new head entity of the Company A ITCG. 25. At Completion, the Shareholders will be required, in accordance with Deed One, to deliver or make available to HoldCo: (a) any original share certificate issued in relation to their Company A shares, if such a certificate was issued, and (b) an executed transfer form in relation to each Shareholder's Company A shares in favour of HoldCo, in a form approved by the directors of HoldCo. 26. HoldCo must procure that a meeting of the directors of Company A is convened at Completion to approve the: (a) transfer to HoldCo of all Company A shares held by the Shareholders, (b) cancellation of any existing share certificates and the issuance of new share certificates in the name of HoldCo in respect of all the shares in Company A, and (c) registration of HoldCo as the holder of all of the shares in Company A in the share and member registers of Company A. 27. HoldCo will then be required to: (a) hold a meeting of HoldCo directors to approve: the issuance of HoldCo shares to the Shareholders the registration of Shareholders as the holders of the HoldCo shares in the share and member registers of HoldCo, and (b) deliver a copy of the share certificate to each Shareholder in relation to the HoldCo shares issued to each Shareholder. 28. Following the restructure, Company A will continue as the main trading entity and the ITCG will continue with HoldCo as the new head company.

Relevant legislative provisions: Income Tax Assessment Act 1936 former section 160ZZPA | Income Tax Assessment Act 1936 former section 160ZZPB | Income Tax Assessment Act 1936 former section 160ZZPC | Income Tax Assessment Act 1936 former section 160ZZPD | Income Tax Assessment Act 1997 Division 615 | Income Tax Assessment Act 1997 Subdivision 615-B | Income Tax Assessment Act 1997 subsection 615-5(1) | Income Tax Assessment Act 1997 subsection 615-5(2) | Income Tax Assessment Act 1997 paragraph 615-5(1)(a) | Income Tax Assessment Act 1997 paragraph 615-5(1)(b) | Income Tax Assessment Act 1997 paragraph 615-5(1)(c) | Income Tax Assessment Act 1997 section 615-15 | Income Tax Assessment Act 1997 subsection 615-20(1) | Income Tax Assessment Act 1997 paragraph 615-20(1)(a) | Income Tax Assessment Act 1997 paragraph 615-20(1)(b) | Income Tax Assessment Act 1997 subsection 615-20(2) | Income Tax Assessment Act 1997 subsection 615-20(3) | Income Tax Assessment Act 1997 paragraph 615-20(3)(a) | Income Tax Assessment Act 1997 section 615-25 | Income Tax Assessment Act 1997 subsection 615-25(1) | Income Tax Assessment Act 1997 subsection 615-25(2) | Income Tax Assessment Act 1997 subsection 615-25(3) | Income Tax Assessment Act 1997 section 615-30 | Income Tax Assessment Act 1997 subsection 615-30(2) | Income Tax Assessment Act 1997 subsection 615-30(3) | Income Tax Assessment Act 1997 subsection 615-30(4) | Income Tax Assessment Act 1997 section 960-130

Reasons for decision: Summary: 1. Under Division 615, a taxpayer may elect to treat a business restructure as tax neutral, provided specific conditions are satisfied. This applies where you dispose of your shares in an existing company and, in return, acquire shares in another company. 2. Subsection 615-5(1) states: You can choose to obtain the roll-over if: (a) you are a member of a company or a unit trust (the original entity ); and (b) you and at least one other entity (the exchanging members ) owns all the shares or units in it; and (c) under a scheme for reorganising its affairs, the exchanging members dispose of all their shares or units in it to a company (the interposed company ) in exchange for shares in the interposed company (and nothing else); and (d) the requirements in Subdivision 615-B are satisfied. 3. Pursuant to section 960-130, the Shareholders are members of Company A (the original entity), and together (as the Exchanging Members) own all the shares in Company A, thereby satisfying the requirements in paragraphs 615-5(1)(a) and (b). 4. The phrase 'scheme for reorganising its affairs' is not defined in the ITAA 1997. However, a similar phrase 'reorganisation of the affairs' (of a unit trust or a company) was used in former sections 160ZZPA, 160ZZPB, 160ZZPC and 160ZZPD of the Income Tax Assessment Act 1936 . 5. In paragraph 31 of Taxation Ruling TR 97/18 Income tax: capital gains: roll-over relief following reorganisation of the affairs of a unit trust or company - sections 160ZZPA, 160ZZPB, 160ZZPC and 16OZZPD (TR 97/18) the following is stated: ... the legislation does not intend that roll-over relief of this type should be available in the case of a merger, but rather should be available for the type of reorganisation where another company is interposed between the owners of an existing entity and that entity. In this way, the owners exchange their existing direct interests in the entity for shares in the interposed company, thus retaining their existing economic ownership of the underlying assets. 6. Under the First Scheme of Proposed Restructure, the disposal by the Shareholders of all their shares in Company A to HoldCo (the interposed company) in exchange for HoldCo shares (and nothing else) constitutes a scheme for reorganising Company A's affairs. Accordingly, the requirement in paragraph 615-5(1)(c) will be satisfied. 7. Subdivision 615-B contains further requirements to be able to choose this roll-over. The relevant requirements for Company A's Shareholders are as follows. | Detailed Reasoning - Section 615-15: 8. Section 615-15 states: The interposed company must own all the *shares or units in the original entity immediately after the time (the completion time ) all the exchanging members have had their shares or units in the original entity disposed of, redeemed of cancelled under the *scheme. 9. At Completion of the First Scheme, HoldCo will acquire all shares in Company A. Consequently, immediately after completion, HoldCo will hold 100% of Company A's shares, thereby satisfying this requirement. | Detailed Reasoning - Subsection 615-20(1): 10. Subsection 615-20(1) states: Immediately after the completion time, each exchanging member must own: (a) a whole number of shares in the interposed company; and (b) a percentage of the shares in the interposed company that were issued to all the exchanging members that is equal to the percentage of the shares or units in the original entity that were: owned by the member; and disposed of under the scheme 11. Immediately after the First Scheme, the Shareholders will own a whole number of shares in HoldCo and their ownership percentage will be equal to their respective ownership interests held in Company A. Accordingly, the requirements in paragraph 615-20(1)(a) and (b) will be satisfied. | Detailed Reasoning - Subsection 615-20(2): 12. Subsection 615-20(2) states: The following ratios must be equal: (a) the ratio of: the *market value of each exchanging members' *shares in the interposed company; to the market value of the shares in the interposed company issued to all the exchanging members (worked out immediately after the completion time) (b) the ratio of: the market value of that members' shares or unit in the original entity that were disposed of, redeemed or cancelled under the *scheme; to the market value of all the shares or units in the original entity that were disposed of, redeemed or cancelled under the scheme (worked out immediately before the first disposal, redemption or cancellation). 13. As the exchange ratio of Company A's shares for HoldCo shares are one for one, the market value ratios test will be satisfied. Immediately after Completion, the market value ratio of each Shareholder's shares in HoldCo will equal the market value ratio of their original shares held in Company A immediately prior to their disposal, given that at the time of the First Scheme HoldCo will have no assets or liabilities other than the incorporation share which will be cancelled at Completion. Accordingly, the market value ratio requirement in subsection 615-20(2) will be satisfied. | Detailed Reasoning - Subsection 615-20(3): 14. Paragraph 615-20(3)(a) relevantly states: you are an Australian resident at the time your *shares or units in the original entity are disposed of, redeemed or cancelled under the *scheme. 15. As all the Shareholders of Company A are Australian residents for income tax purposes at the time they will dispose of their shares, the requirement in subsection 615-20(3)(a) will be satisfied. | Detailed Reasoning - Section 615-25: 16. Section 615-25 states: (1) The *shares issued in the interposed company must not be *redeemable shares. (2) Each exchanging member who is issued *shares in the interposed company must own the shares from the time they are issued until at least the completion time. (3) Immediately after the completion time: (a) the exchanging members must own all the *shares in the interposed company; or (b) entities other than those members must own no more than 5 shares in the interposed company and the *market value of those shares expressed as a percentage of the market value of all the shares in the interposed entity must be such that it is reasonable to treat the exchanging members as owning all the shares. 17. The shares issued by HoldCo to the exchanging Shareholders will be ordinary shares, not redeemable shares. Therefore, the requirement in subsection 615-25(1) will be satisfied. 18. The Shareholders will own the shares in HoldCo issued to them at least until the completion of the First Scheme. Therefore, the requirement in subsection 615-25(2) will be satisfied. 19. Prior to the First Scheme, HoldCo was incorporated with one ordinary $1.00 share (the incorporation share). The incorporation share was not issued as part of the scheme for re-organising Company A's corporate structure. The First Scheme will be executed simultaneously with the cancellation of the incorporation share in HoldCo. Following the First Scheme, the Shareholders will own all the shares in HoldCo other than the incorporation share in HoldCo. Therefore, the requirement in subsection 615-25(3) will be satisfied. | Detailed Reasoning - Section 615-30: 20. Unless subsection 615-30(2) applies, the interposed company must choose that section 615-65 applies. [1] 21. Subsection 615-30(2) states: The interposed company must choose that a *consolidated group continues in existence at and after the completion time with the interposed company as its *head company, if: (a) immediately before the completion time, the consolidated group consisted of the original entity as head company and one or more other members (the other group members ); and (b) immediately after the completion time, the interposed company is the head company of a *consolidatable group consisting only of itself and the other group members. 22. Immediately before the Completion time, Company A is the head company of a consolidated group, and immediately after the Completion time, HoldCo will be the head company of a consolidatable group consisting of itself and the members of the Company A ITCG. Therefore, subsection 615-30(2) applies and HoldCo must choose that a consolidated group continues in existence at and after the Completion time with HoldCo as the head company. 23. As subsection 615-30(2) applies, the choice must be made within 28 days after the Completion time, or such further time as the Commissioner allows, [2] and the way HoldCo prepares its income tax returns is sufficient evidence of the making of the choice. [3] | Detailed Reasoning - Conclusion: 24. From the information provided, all of the requirements for roll-over under Division 615 will be satisfied in relation to the Proposed Restructure of Company A. 25. As long as HoldCo makes the choice referred to in section 615-30, the ITCG will continue in existence at and after the completion time. 26. Subsection 615-5(2) states: You are taken to have chosen to obtain roll-over if: (a) immediately before the completion time (see section 615-15), the original entity is the *head company of a *consolidated group; and (b) immediately after the completion time, the interposed company is the head company of the group. 27. Immediately before the completion time, Company A is the head company of a consolidated group and immediately after the completion time, HoldCo will be the head company of the consolidatable group. Therefore, pursuant to the operation of subsection 615-5(2), the Shareholders of Company A are taken to have chosen to obtain the roll-over under Division 615. [1] Subsection 615-30(1) [2] Subsection 615-30(3) [3] Subsection 615-30(4)