Private ruling: CGT - rollovers - business restructures
Date of advice: 23 June 2023
Published: 14 August 2023
Ruling period: Income year ending 30 June 20XX | Income year ending 30 June 20XX

Ruling: Q1: Will the unitholders in the A Unit Trust (AUT)(Unitholders) be eligible to choose CGT roll-over relief under Division 615 of the Income Tax Assessment Act 1997 (ITAA 1997) on exchanging their units in AUT for shares in A Group Holdings Pty Ltd (AGH)? | A1: Yes. | Q2: Is Z Pty Ltd as trustee for (ATF) Z Family Trust (ZFT) taken to have acquired X of its replacement shares in AGH before 20 September 1985 in accordance with sections 615-40 and 124-15 of the ITAA 1997? | A2: Yes. | Q3: Is any choice that the Unitholders make under section 615-5 of the ITAA 1997 to obtain roll-over relief due by the day the income tax return is lodged for the income year in which the relevant CGT event happens, and can that choice be evidenced by the way in which the income tax return is prepared? | A3: Yes. | Q4: Will the provision by AGH to the Commissioner within two months after the Proposed Restructure of a document which states that AGH is choosing that section 615-65 of the ITAA 1997 applies, and which is signed by the Public Officer of AGH, satisfy the requirements under subsection 615-30(1) of the ITAA 1997? | A4: Yes.

Relevant facts and circumstances: A Group 1. AUT was established in 19XX. It has one class of units on issue. 2. Since its establishment in 19XX, AUT has, at all relevant times, owned and operated a business (the Business) in various states in Australia. 3. AUT has a number of wholly-owned subsidiaries, collectively, for the purposes of this ruling referred to as the A Group. 4. The trustee of AUT (Trustee) is A Pty Ltd. A Pty Ltd has minimal assets and liabilities. Its only role is as trustee of AUT. 5. AUT is owned by a number of Unitholders that include the trustees of a number of discretionary trusts as well as the trustee of a self managed superannuation fund. 6. ZFT is a Unitholder and holds X units in AUT that were acquired before 20 September 1985. The units acquired by ZFT before 20 September 1985 represent a portion of its unitholding in AUT. 7. The trustee of each discretionary trust that is a Unitholder is a resident of Australia. The self managed superannuation fund meets the definition of an 'Australian superannuation fund' in subsection 295-95(2) of the ITAA 1997. 8. AGH was incorporated with one share in 20XX. Proposed Restructure 9. The AUT and its Unitholders intend to restructure the ownership of the AUT to corporatise the Business with a new corporate head entity, AGH (the Proposed Restructure). 10. The Proposed Restructure will result in the interposition of AGH between AUT and the Unitholders. 11. The Proposed Restructure steps are: • Step 1: the incorporation of AGH as an Australian company with one ordinary share (Incorporation Share) held by an incorporation holder. • Steps 2 and 3: the incorporation holder approves AGH's equal capital reduction and cancellation of the Incorporation Share under section 256C of the Corporations Act 2001 to take effect contemporaneously with the issue of X AGH shares to the Unitholders. AGH contemporaneously cancels the Incorporation Share held by the incorporation holder. • Step 4: the Unitholders transfer their portion of the X AUT units to AGH in return for the same number of ordinary AGH shares. 12. As at the date of the Proposed Restructure, the market value of AUT units will equal the market value of AGH's shares since AGH will have no other assets or liabilities other than AUT units. 13. The A Group board has approved the Proposed Restructure and intend to implement it. 14. The Unitholders of AUT propose to implement the Proposed Restructure to corporatise the head entity of the A Group for the following reasons: • capital management; • insurance; • corporate governance; • commercial; and • tax and accounting. Refinancing of the Business 15. In addition to the Proposed Restructure, the board of the Trustee had been considering a variety of options to provide additional finance to the Business. The board of the Trustee had been considering both the Proposed Restructure and refinancing for at least X months. These processes have been separate projects. Options that were considered included refinancing from Unitholders and/or external lenders, a potential IPO and trade sale. 16. On 2X XX 20XX, AUT was recapitalised by $X million which involved existing Unitholders subscribing to additional ordinary units in AUT. As a result of this capitalisation, other forms of refinancing previously considered are no longer required and are not being pursued by AUT. Assumptions 1. X AUT units held by ZFT satisfy the requirements of section 149-10 of the ITAA 1997 as pre-CGT assets. 2. For the purposes of question 1 of this ruling, AGH will choose that section 615-65 of the ITAA 1997 applies for the purposes of subsection 615-30(1) of the ITAA 1997 and will make the choice within the required timeframe to make such a choice under subsection 615-30(3) of the ITAA 1997.

Relevant legislative provisions: Income Tax Assessment Act 1997 Part 3-1 | Income Tax Assessment Act 1997 subsection 103-25(1) | Income Tax Assessment Act 1997 subsection 103-25(2) | Income Tax Assessment Act 1997 Part 3-3 | Income Tax Assessment Act 1997 Division 124 | Income Tax Assessment Act 1997 Subdivision 124-A | Income Tax Assessment Act 1997 section 124-10 | Income Tax Assessment Act 1997 section 124-15 | Income Tax Assessment Act 1997 subsection 124-15(4) | Income Tax Assessment Act 1997 subsection 124-15(5) | Income Tax Assessment Act 1997 former Subdivision 124-G | Income Tax Assessment Act 1997 former Subdivision 124-H | Income Tax Assessment Act 1997 section 149-10 | Income Tax Assessment Act 1997 subsection 295-95(2) | Income Tax Assessment Act 1997 Part 3-80 | Income Tax Assessment Act 1997 Division 615 | Income Tax Assessment Act 1997 section 615-5 | Income Tax Assessment Act 1997 subsection 615-5(1) | 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 paragraph 615-5(1)(d) | Income Tax Assessment Act 1997 subsection 615-5(2) | Income Tax Assessment Act 1997 Subdivision 615-B | Income Tax Assessment Act 1997 section 615-15 | Income Tax Assessment Act 1997 section 615-20 | 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 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(1) | Income Tax Assessment Act 1997 subsection 615-30(2) | Income Tax Assessment Act 1997 subsection 615-30(3) | Income Tax Assessment Act 1997 paragraph 615-30(3)(a) | Income Tax Assessment Act 1997 paragraph 615-30(3)(b) | Income Tax Assessment Act 1997 paragraph 615-30(3)(c) | Income Tax Assessment Act 1997 subsection 615-30(4) | Income Tax Assessment Act 1997 section 615-35 | Income Tax Assessment Act 1997 section 615-40 | Income Tax Assessment Act 1997 section 615-65 | Income Tax Assessment Act 1997 subsection 960-130(1) | Income Tax Assessment Act 1997 subsection 995-1(1) | Income Tax Assessment Act 1936 section 6 | Income Tax Assessment Act 1936 paragraph 95(2)(a) | 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 | Corporations Act 2001 section 256C

Reasons for decision: Summary: Yes. The Unitholders will be eligible to choose CGT roll-over relief under Division 615 for the exchange of their units in AUT for shares in AGH because they meet all the relevant conditions in Division 615. | Detailed Reasoning - Detailed reasoning: Broadly, Division 615 applies to a scheme to restructure a company's or unit trust's business where members cease to own shares in the company or units in the trust, and in exchange become the owner of new shares in another company. Division 615 enables such members, known as 'exchanging members', to choose to apply CGT roll-over relief to the disposal of their shares in the company or units in the unit trust which might otherwise give rise to a CGT event. The requirements relevant to the Unitholders to choose the CGT roll-over are contained in sections 615-5, 615-15, 615-20, 615-25 and 615-30. | Detailed Reasoning - Section 615-5: Subsection 615-5(1) states that an exchanging member can obtain roll-over relief if: a. they are a member of a company or a unit trust (the original entity) - paragraph 615-5(1)(a); b. they and at least one other exchanging member own all the shares or units in the original entity - paragraph 615-5(1)(b); c. under a scheme for reorganising the affairs of the original entity, the exchanging members dispose of all their shares or units in the original entity to a company (the interposed company) in exchange for shares in the interposed company and nothing else - paragraph 615-5(1)(c); and d. the requirements in Subdivision 615-B are satisfied - paragraph 615-5(1)(d). Applying the requirements in subsection 615-5(1) to the Unitholders and AUT: a. each Unitholder that is seeking to obtain roll-over relief must be a member in AUT which is the original entity; b. the Unitholders are collectively exchanging members and must between them own all the units in AUT; c. the Proposed Restructure must constitute a 'scheme for reorganising [the] affairs' of AUT and the Unitholders must dispose of all their units in AUT to an interposed company in exchange for shares in the interposed company and nothing else; and d. the additional requirements in Subdivision 615-B must be satisfied. | Detailed Reasoning - Each Unitholder is a member of AUT (the original entity): Subsection 960-130(1) sets out who is a member of various entities. Under item 3 of the table in subsection 960-130(1) a unitholder of a trust is a member of that trust. Therefore, the Unitholders are members of AUT on the basis that they are unitholders in AUT. The condition in paragraph 615-5(1)(a) is therefore satisfied. | Detailed Reasoning - Unitholders own all the units in AUT: Paragraph 615-5(1)(b) requires that at least two exchanging members own all the units in the original entity. As set out in the latest register of unitholders, AUT has X units on issue and multiple unitholders hold these units. Therefore, between them, the Unitholders (who are exchanging members) own 100% of the units in AUT and paragraph 615-5(1)(b) is satisfied. | Detailed Reasoning - Scheme for reorganising the affairs of the original entity: Paragraph 615-5(1)(c) requires the exchange of units in the original entity for shares in the interposed company to take place under a 'scheme for reorganising its [the original entity's] affairs'. 'Scheme' is defined in subsection 995-1(1) as any arrangement or any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise. The phrase 'scheme for reorganising its affairs' is not defined in the ITAA 1997 or the Income Tax Assessment Act 1936 (ITAA 1936). 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 ITAA 1936. The ATO discussed the meaning of these provisions in 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) . Paragraph 26 of TR 97/18 states: ...the expression 'scheme for the reorganisation of the affairs of a unit trust' must be interpreted in the context in which that expression appears. What is meant is the interposition of a company between the unit trust and its unitholders. The Proposed Restructure constitutes a scheme for reorganising the affairs of AUT since it involves the interposition of a company between a unit trust and its unitholders. However, we must also consider if the 'scheme for reorganising' could extend to other transactions that might occur before or after the Proposed Restructure. In paragraph 32 of TR 97/18: It is not possible to consider parts of schemes in isolation. In considering a scheme, we must look at the entirety of the scheme and its effect in determining whether the scheme is one for the reorganisation of the affairs of a unit trust. This suggests that while a scheme could include the interposition of a company between a unit trust and its unitholders, this may be just a part of a broader scheme or arrangement which must be considered and may be properly identified as the 'scheme for reorganisation' of the affairs of a unit trust for the purposes of paragraph 615-5(1)(c). Taxation Determination TD 2020/6 Income tax: what is a 'restructuring' for the purposes of subsection 125-70(1) of the Income Tax Assessment Act 1997? (TD 2020/6) discusses the meaning of the phrase 'restructuring of the demerger group,' which is used in Division 125, which provides roll-over relief for demergers. TD 2020/6 makes several points at paragraphs 2 through 12 for identifying the restructuring, including that: • what steps form part of the restructuring is a question of fact; [1] • all the steps which occur under a single plan of reorganisation will usually constitute the restructuring; [2] • the restructuring is not necessarily confined to the steps or transactions that deliver ownership interests, but may include previous and/or subsequent transactions in a sequence of transactions; [3] • transactions that occur under a plan of reorganisation may form part of the restructuring even though they are legally independent of each other, contingent on different events, or may not occur; [4] • conversely, a transaction is not necessarily part of the restructuring merely because it is enabled by the restructuring or is a consequence of the restructuring; [5] • the fact that transactions or steps are separated by several months does not automatically mean that they cannot form part of the same restructuring. Temporal proximity is a relevant, but not decisive factor; [6] and • the purpose is to determine whether the identified restructuring has resulted in a change in the economic position of the owners of the original interests in the head entity of the demerger group. [7] While the phrase 'restructuring of the demerger group' is not used in Division 615, we consider that the general approach taken in TD 2020/6 would be relevant to identifying the 'scheme for reorganising its affairs'. Taken together, both TR 97/18 and TD 2020/6 suggest that when evaluating an arrangement's eligibility for CGT roll-over relief, multiple transactions may form part of the relevant scheme. Therefore, we need to determine which steps in the proposed transactions form part of the 'scheme for reorganising' the affairs of the original entity. Of particular relevance is whether the recapitalisation forms part of the 'scheme'. The scope of the 'scheme' is also relevant to the 'and nothing else' requirement in paragraph 615-5(1)(c) (as discussed further below). Having regard to the circumstances, it is considered that the recapitalisation is not part of the 'scheme' for the reorganisation of the affairs of AUT for the purposes of paragraph 615-5(1)(c). This is on the basis that the recapitalisation is best characterised as a separate step to the Proposed Restructure taking into account the following factors: • the refinancing of the business has been a separate process and separate project to the Proposed Restructure; Therefore, the scheme for reorganisation of the affairs of AUT is limited to the Proposed Restructure and does not include the refinancing. | Detailed Reasoning - 'And nothing else' requirement: An additional requirement under paragraph 615-5(1)(c) is that the exchanging members must only receive shares in the interposed company and nothing else, in return for disposing all their units to the interposed company. As concluded, the recapitalisation that occurred is not part of the scheme to reorganise the affairs of AUT. AUT has also advised that other forms of financing previously being considered by AUT are no longer required and are not being pursued. On this basis, under the Proposed Restructure the Unitholders will only receive shares in AGH and nothing else, in return for the disposal of their units in AUT. Therefore the 'nothing else' requirement is satisfied as well as all the other conditions in paragraph 615-5(1)(c). | Detailed Reasoning - Subdivision 615-B: Subdivision 615-B imposes the following requirements: a. the interposed company must own all the original interests - section 615-15; b. requirements relating to each exchanging member's interests in the original entity - section 615-20; c. requirements relating to the interposed company - section 615-25; and d. the interposed company must make a particular choice - section 615-30. The requirement under section 615-35 is not relevant since it is only applicable to ADI restructures and no entity involved in the Proposed Restructure is or will be an ADI. Each of the requirements in Subdivision 615-B that is outlined above is discussed further in the table below. Table 1: Each of the requirements in Subdivision 615-B that is outlined above is discussed further in the table below. | Detailed Reasoning - Interposed company must own all the original interests: Section 615-15 Interposed company must own all the units in the original entity immediately after the 'completion time', being the time all the unit holders have had their units in the original entity disposed of under the scheme. This is satisfied on the basis that immediately after, and as a result of, the Proposed Restructure AGH will own 100% of the units in AUT. | Detailed Reasoning - Requirements relating to each exchanging member's interests in the original entity: Paragraphs 615-20(1)(a) and (b) 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 is equal to the percentage of their former holding in the original entity that was disposed of under the scheme. This is satisfied on the basis that immediately after the completion time, each Unitholder will own shares in AGH in an equivalent proportion to how they owned their units in AUT. Subsection 615-20(2) For each exchanging member the following ratios must be equal: a. the ratio of the market value of each exchanging member's 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 each exchanging member's units in the original entity that were disposed of under the scheme to the market value of all the units in the original entity that were disposed of under the scheme, worked out immediately before the first disposal. This is satisfied on the basis that: • the market value of AGH shares will be the same as the market value of AUT units since the only asset that AGH will own will be the units in AUT; • the proportion of shares in AGH that will be issued to and owned by each Unitholder will be the same as the proportion of units in AUT that each Unitholder owned and will dispose of in AUT; and • the market value of each Unitholder's shares in AGH will therefore be the same as the market value of each Unitholder's unitholding in AUT. Subsection 615-20(3) Each exchanging member seeking roll-over relief must be either: a. an Australian resident at the time the units in the original entity are disposed of under the scheme; or b. a foreign resident at that time and the units in the original entity were taxable Australian property (TAP) immediately before that time and the shares in the interposed company are TAP immediately after the completion time. Subsection 995-1(1) defines an 'Australian resident' as a person who is a resident of Australia for the purposes of the ITAA 1936. The definition of 'resident of Australia' in section 6 of the ITAA 1936 contains rules relating to the residency of individuals and companies, but not for trust estates. In accordance with paragraph 95(2)(a) of the ITAA 1936, a trust is taken to be a 'resident trust estate' if the trustee of the trust was a resident at any time during the year of income. In the absence of specific rules for residency of a trust under section 6 of the ITAA 1936, the residency of a trust is determined based on the trustee's residency. In respect of each discretionary trust, each trustee is a company incorporated in Australia. Under section 6 of the ITAA 1936, a resident of Australia includes a company which is incorporated in Australia. On the basis the trustees of the above trusts are residents of Australia, the discretionary trusts are Australian residents for the purpose of subsection 615-20(3). The residency status of a superannuation fund is determined in accordance with the definition of 'Australian superannuation fund' in subsection 295-95(2). This requires the fund to satisfy 3 conditions: • the fund was established in Australia; • the central management and control of the fund is ordinarily in Australia; and • the fund has active members who are Australian residents and who hold at least 50% of the total market value of the fund's assets attributable to superannuation interests or 50% of the sum of the amounts that would be payable to active members if they decided to voluntarily cease to be members. The self managed superannuation fund is an Australian resident for the purpose of subsection 615-20(3) on the basis that the fund: • was established in Australia; • central management and control of the fund is ordinarily in Australia; and • the fund has active members who are Australian residents and who hold at least 50% of the total market value of the fund's assets attributable to superannuation interests or the sum of the amounts that would be payable to active members if they decided to leave the fund and cease to be members. The Unitholders therefore satisfy subsection 615-20(3). | Detailed Reasoning - Requirements relating to the interposed entity: Subsection 615-25(1) The shares issued in the interposed company must not be redeemable shares. This is satisfied since only ordinary shares will be issued in AGH to the Unitholders. Subsection 615-25(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. This is satisfied since Unitholders will hold 100% of the shares in AGH from the time of issue until after the Proposed Restructure. Subsection 615-25(3) Immediately after the completion time the exchanging members must own all the shares in the interposed company, or entities other than those members must own no more than 5 shares in the interposed company and the market value of those shares must represent a small or negligible percentage of the total market value of all the shares in the interposed company. This is satisfied since the Unitholders will own 100% of the shares in AGH immediately after the Proposed Restructure. | Detailed Reasoning - Interposed company must make a particular choice: Section 615-30 Unless subsection 615-30(2) applies, the interposed company must choose that section 615-65 applies. Subsection 615-30(2) applies if immediately before the completion time the consolidated group consisted of the original entity as head company and one or more members (the other group members); and 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. The choice must be made: • within 2 months after the completion time if the choice is under subsection 615-30(1) - paragraph 615-30(3)(a); or • within 28 days after completion time if the choice is under subsection 615-30(2) - paragraph 615-30(3)(b); or • within such further time as the Commissioner allows - paragraph 615-30(3)(c). Subsection 615-30(2) does not apply since AUT is not and will not be (immediately before the completion time) the head company of an income tax consolidated group. Therefore, under subsection 615-30(1), AGH must choose that section 615-65 applies. An assumption is made that AGH will choose that section 615-65 applies and will make the required choice within the time specified under subsection 615-30(3). Therefore the requirements of section 615-30 are satisfied. In summary, all the requirements in Subdivision 615-B are satisfied. Since all the other requirements in subsection 615-5(1) are also satisfied, each Unitholder can choose to obtain a roll-over under Division 615. | Summary: Yes, on the basis that X of the original units in AUT held by ZFT were acquired before 20 September 1985, X of the replacement shares in AGH issued to ZFT are taken to have been acquired before 20 September 1985 pursuant to sections 615-40 and 124-15. | Detailed Reasoning - Detailed reasoning: X AUT units held by ZFT were acquired before 20 September 1985. An assumption is made that these units satisfy the requirements of section 149-10 and are therefore pre-CGT assets. Section 615-40 provides that the consequences for original interest holders under a Division 615 roll-over are the same as for a roll-over covered under Division 124. Subdivision 124-A sets out the consequences for roll-overs under Division 124 (about replacement-asset roll-overs). Section 124-10 sets out the consequences if your ownership of one CGT asset ends. It does not apply to ZFT since the trust owns more than one unit in AUT. Under subsection 124-15(4), if you acquired all the original assets before 20 September 1985, you are taken to have acquired each new asset before that day. This does not apply to ZFT since not all of ZFT's units in AUT were acquired before 20 September 1985. Subsection 124-15(5) provides that if you acquired some of the original assets before 20 September 1985, you are taken to have acquired a number of new assets before that day. It is the maximum possible that does not exceed: The number of new assets×The number of original assets you acquired before 20 September 1985÷The total number of original assets The number of new assets [AGH shares issued to ZFT] is X. The number of original assets acquired before 20 September 1985 is X. The total number of original assets [AUT units owned by ZFT] is X. Therefore, ZFT will be taken to have acquired X AGH shares before 20 September 1985. | Summary: Yes. A choice to apply the roll-over in Division 615 must be made by each Unitholder by the day it lodges is income tax return for the income year in which the relevant CGT event happens (being when each Unitholder disposes of its units in AUT under CGT event A1) or within such time as allowed by the Commissioner. The way in which each Unitholder prepares its income tax return is sufficient evidence of the making of this choice. | Detailed Reasoning - Detailed reasoning: Division 615 does not specify how or when the exchanging members should make the choice to apply the roll-over under section 615-5 where the circumstances do not fall within those mentioned in subsection 615-5(2). Under subsection 615-5(2), the Unitholders will be taken to have chosen to obtain roll-over relief if immediately before the completion time AUT is the head company of a consolidated group and immediately after the completion time AGH is the head company of the group. This is not the case here since AUT is not the head company of a consolidated group immediately before the completion time. However, the Explanatory Memorandum to Tax and Superannuation Laws Amendment (2014 Measures No.6) Bill 2014 mentions [8] that Division 615 was intended to be a re-write and consolidation of former Subdivisions 124-G and 124-H. On that basis, it may be considered that the way the taxpayer would choose a roll-over under Division 615 should be the same as under the former Subdivisions 124-G and 124-H. Subsections 103-25(1) and (2) governed the way a choice was made to apply those former roll-overs: • under subsection 103-25(1), a choice must be made by the day on which the taxpayer lodges its return for the income year in which the relevant CGT event occurs, or within any further time allowed by the Commissioner; and It is noted that subsections 103-25(1) and (2) strictly only apply to choices in the CGT provisions in Parts 3-1 and 3-3, so does not cover the choice of roll-over under Division 615 which falls within Part 3-80. However, for the reasons that Division 615 is silent on the method and timing of the choice to apply the roll-over and that it is meant to replace the roll-overs in former Subdivisions 124-G and 124-H, it is considered that: • a choice to apply the roll-over in Division 615 must be made by each Unitholder by the day it lodges its income tax return for the income year in which the relevant CGT event happens (being when each Unitholder disposes of its units in AUT under CGT event A1) or within such time as allowed by the Commissioner; and | Summary: Yes. The provision by AGH to the Commissioner of a document within 2 months of the Proposed Restructure stating that AGH chooses that section 615-65 applies will satisfy the requirements of subsection 615-30(1) and be accepted by the Commissioner as evidence of such a choice being made within the statutory timeframe required by paragraph 615-30(3)(a). | Detailed Reasoning - Detailed reasoning: Subsection 615-30(1) requires the interposed company to make a choice that section 615-65 applies. Paragraph 615-30(3)(a) states that the choice must be made within 2 months after the completion time and subsection 615-30(4) states that the way the interposed company prepared its income tax returns is sufficient evidence of the making of the choice. No formal notification needs to be provided to the Commissioner in relation to the timing of the making of the choice exercised by the interposed company under subsection 615-30(1). Therefore, while a provision of a document within two months after the Proposed Restructure, signed by the Public Officer of AGH to the Commissioner stating that AGH chooses that section 615-65 applies is not strictly necessary to evidence the timing of the making of the choice, it will be accepted by the Commissioner as evidence of such choice being made within the statutory timeframe required by paragraph 615-30(3)(a). [1] Paragraph 2 of TD 2020/6. [2] Paragraph 2 of TD 2020/6. [3] Paragraph 2 of TD 2020/6. [4] Paragraph 3 of TD 2020/6. [5] Paragraph 4 of TD 2020/6. [6] Paragraph 9 of TD 2020/6. [7] Paragraph 8 of TD 2020/6. [8] See paragraphs 1.31 and 1.35 of Explanatory Memorandum to Tax and Superannuation Laws Amendment (2014 Measures No.6) Bill 2014.

Reasons for decision: All subsequent legislative references are to the ITAA 1997, unless otherwise specified. | both the refinancing and the Proposed Restructure are commercially explicable in isolation and independent of each other; and | there is nothing to suggest that the refinancing is a step in a plan to alter the ownership of interests in AUT. | under subsection 103-25(2), the way a taxpayer prepared its income tax returns is sufficient evidence of the making of the choice. | the way each Unitholder prepares its income tax return is sufficient evidence of the making of this choice.