Income Tax Assessment Act 1936

s 326-200 — Disposal of interest in trust that holds shares in demutualised entity

(1) This section applies if: (a) under the distributing trust method of demutualisation of a mutual entity: (i) the membership rights of an existing member of the entity are extinguished; and (ii) shares in the demutualised entity are issued to a trustee; and (b) as a result of the extinguishment of the rights, the member acquires an interest in the trust constituted by the right to have shares in the demutualised entity held by the trustee transferred by the trustee to the member or disposed of by the trustee on behalf of the member; and (c) the member disposes of the whole or a part of the interest otherwise than by receiving the shares or proceeds of the sale of the shares. (2) For the purpose of working out whether the member made a capital gain or capital loss from the disposal, the member is taken to have done the following: (a) to have paid for the acquisition of the interest in the trust the amount worked out by using the formula: (b) to have paid that amount, and to have acquired the interest, on the demutualisation resolution day. (3) In the formula in paragraph (2)(a): cost of a share means the amount that would have been taken to have been paid by the member for the acquisition of a share in the demutualised entity under Subdivisions 326 ‑ D, 326 ‑ E and 326 ‑ F if the disposal had been the disposal of the shares to which the interest or the part of the interest in the trust related. number of shares means the number of shares in the demutualised entity to which the interest in the trust related. (4) If the member is a pre ‑ CGT member who did not acquire membership rights in the demutualising entity by disposing of membership rights in another mutual entity, any capital loss made from the disposal before the demutualisation listing day, or, if there is no such day, before the day on which the shares in the demutualised entity were issued, is to be disregarded.

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2)

s 326-205 — Transfer of share or distribution of proceeds of sale of share not to have any CGT consequences

If a trustee transfers an ordinary share or distributes the proceeds of the sale of an ordinary share as mentioned in subparagraph 326 ‑ 55(1)(h)(ii), Parts 3 ‑ 1 and 3 ‑ 3 of the Income Tax Assessment Act 1997 do not apply in respect of any CGT event constituted by or arising from the transfer or distribution.

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2) | Amended by No 101 of 2006, Sch 2 item 561, effective Sch 1 (items 1, 5–199), Sch 2 (items 118–565, 1017, 1023–1037) and Sch 6 (items 1–4, 6–15): 14 Sept 2006 (s 2(1) items 2, 4) Sch 3 (items 1–10) and Sch 4 (items 1–11): 1 Jan 2008 (s 2(1) item 3)

s 326-210 — Disposal by a trustee

If: (a) under the distributing trust method of demutualisation, shares in a demutualised entity are issued to a trustee on behalf of a member; and (b) the trustee disposes of a share or an interest in a share, or disposes of a non ‑ demutualisation bonus share or an interest in such a share, on behalf of the member; the disposal is taken for the purposes of Subdivisions 326 ‑ D, 326 ‑ E and 326 ‑ F to have been a disposal of the share or interest by the member.

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2)

s 326-215 — Change of rights to, and replacement of, special shares

(1) This Subdivision applies where, under the distributing trust method of demutualisation of a mutual entity, the rights attaching to special shares issued to a trustee on behalf of a member become the same as the rights attaching to ordinary shares. (2) Parts 3 ‑ 1 and 3 ‑ 3 of the Income Tax Assessment Act 1997 do not apply in respect of the change in rights.

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2) | Amended by No 101 of 2006, Sch 2 item 562, effective Sch 1 (items 1, 5–199), Sch 2 (items 118–565, 1017, 1023–1037) and Sch 6 (items 1–4, 6–15): 14 Sept 2006 (s 2(1) items 2, 4) Sch 3 (items 1–10) and Sch 4 (items 1–11): 1 Jan 2008 (s 2(1) item 3)

s 326-220 — Disposal of shares or interest in shares

(1) This section applies where: (a) under any method of demutualisation, a mutual entity, or a holding company of a mutual entity, becomes a listed public company; and (b) a disposal of a share, or of an interest in a share, in the entity or holding company takes place before the demutualisation listing day; and (c) a roll ‑ over provision applies to the disposal; and (d) the person who disposed of the share or interest would, except for section 326 ‑ 75 and paragraph (c) of this subsection, have made a capital loss as a result of the disposal; and (e) the person who is taken to acquire the share or interest under the roll ‑ over provision (the transferee ) disposes of the share or interest. (2) If the disposal by the transferee takes place before the demutualisation listing day, any capital loss that the transferee makes from that disposal is disregarded. (3) If the disposal by the transferee takes place on or after the demutualisation listing day, Subdivision 326 ‑ D applies to the disposal referred to in paragraph (1)(b) as if that disposal had taken place on or after that day. (4) In this section: disposal includes a disposal that would have occurred except for former section 160X. roll ‑ over provision means: (a) former section 160X; or (b) any provision of Division 17 of Part III; or (c) Division 128 of the Income Tax Assessment Act 1997 ; or (d) any provision of Divisions 122 and 126 of Part 3 ‑ 3 of the Income Tax Assessment Act 1997 .

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2) | Amended by No 101 of 2006, Sch 2 item 563, effective Sch 1 (items 1, 5–199), Sch 2 (items 118–565, 1017, 1023–1037) and Sch 6 (items 1–4, 6–15): 14 Sept 2006 (s 2(1) items 2, 4) Sch 3 (items 1–10) and Sch 4 (items 1–11): 1 Jan 2008 (s 2(1) item 3) | Amended by No 97 of 2008, Sch 3 item 42, effective Sch 1 (items 1, 2, 12) and Sch 3 (items 5–43): 3 Oct 2008 (s 2(1) items 2, 3)

s 326-225 — Payment out of assets of demutualised entity that is not included in assessable income is taken not to be a dividend

If: (a) a payment out of the assets of a demutualised entity is made to a taxpayer who holds shares or an interest in shares in the entity; and (b) the amount paid is a dividend that is not included in the taxpayer’s assessable income; the payment is taken, for the purposes of section 104 ‑ 135 of the Income Tax Assessment Act 1997 , not to be the payment of a dividend.

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2) | Amended by No 101 of 2006, Sch 2 item 565, effective Sch 1 (items 1, 5–199), Sch 2 (items 118–565, 1017, 1023–1037) and Sch 6 (items 1–4, 6–15): 14 Sept 2006 (s 2(1) items 2, 4) Sch 3 (items 1–10) and Sch 4 (items 1–11): 1 Jan 2008 (s 2(1) item 3)

s 326-230 — Indexing of amounts

Some provisions of this Division require amounts to be indexed. An amount is indexed by multiplying it by its indexation factor.

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2)

s 326-235 — Indexation factor

(1) For the indexation of the amount worked out under subsection 326 ‑ 120(2) or 326 ‑ 170(6) in relation to a person who acquired membership rights in a demutualising entity by the disposal of membership rights in another mutual entity, the indexation factor is: (2) For the indexation of an undeducted amount referred to in subsections 326 ‑ 125(1) and (2) or 326 ‑ 175(1) and (2) of a cost incurred by a person in acquiring or maintaining membership in a demutualising entity or another entity, the indexation factor is: (3) An indexation factor is to be worked out to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

Amendment history: Inserted by No 103 of 1999, Sch 2H item 326, effective Sch 1: 16 July 1999 (s 2)

s 326-240 — Index number

(1) The index number for a quarter is the All Groups Consumer Price Index number (being the weighted average of the 8 capital cities) first published by the Australian Statistician for the quarter. (2) If the Australian Statistician changes the index reference period for an index number, only index numbers published in terms of the new index reference period are to be used after the change.

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2) | Amended by No 145 of 2015, Sch 4 item 19 | Sch 4 item 20, effective Sch 4 (items 18–20): 10 Dec 2015 (s 2(1) item 7)

s 326-245 — General taxation consequences of issue of demutualisation shares

If any demutualisation shares are issued to a taxpayer under any method of demutualisation, no amount is to be included in the taxpayer’s assessable income because of the issue of the shares to the taxpayer. Income Tax Assessment Act 1936 No. 27, 1936 Compilation No. 191 Compilation date: 1 April 2026 Includes amendments: Act No. 12, 2026 This compilation is in 7 volumes Volume 1: sections 1 ‑ 78A Volume 2: sections 79A ‑ 121L Volume 3: sections 124ZM ‑ 204 Volume 4: sections 251R ‑ 468 Volume 5: Schedules Volume 6: Endnotes 1 ‑ 4 Volume 7: Endnote 5 Each volume has its own contents About this compilation This compilation This is a compilation of the Income Tax Assessment Act 1936 that shows the text of the law as amended and in force on 1 April 2026 (the compilation date ). The notes at the end of this compilation (the endnotes ) include information about amending laws and the amendment history of provisions of the compiled law. Uncommenced amendments The effect of uncommenced amendments is not shown in the text of the compiled law. The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). Application, saving and transitional provisions If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes. Editorial changes For more information about any editorial changes made in this compilation, see the endnotes. Presentational changes The Legislation Act 2003 provides for First Parliamentary Counsel to make presentational changes to a compilation. Presentational changes are applied to give a more consistent look and feel to legislation published on the Register, and enable the user to more easily navigate those documents. Modifications If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. Any modifications affecting the law are accessible on the Register. Self ‑ repealing provisions If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes. Contents

Amendment history: Inserted by No 103 of 1999, effective Sch 1: 16 July 1999 (s 2)