Private ruling: Demerger
Date of advice: 5 February 2020
Published: March 2020

Ruling: Q1: Will the head entity of a demerger group be able to disregard any capital gain it makes from CGT event A1 happening in accordance with section 125-155 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes

Relevant facts and circumstances: Company X owned more than 20% of the shares in Company Z. Company X transferred all of the shares it owned in Company Z to the shareholders of Company X. Company X was the head entity of a demerger group. Company Z was a demerger subsidiary of Company X. The transfer of shares was a 'demerger' as defined in section 125-70 of the ITAA 1997.