Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:16_1:p6
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 16 cl 1 (pt 6/12)
Character Range: 456377–459174

of original interests in the *head entity of the *demerger group must:
 (a) *acquire, under the *demerger, the same proportion, or as nearly as practicable the same proportion, of new interests in the *demerged entity as the original owner owned in the head entity just before the demerger; and
 (b) just after the demerger, have the same proportionate total *market value of *ownership interests in the head entity and demerged entity as the original owner owned in the head entity just before the demerger.
Note 1: There is an exception: see section 125‑75.
Note 2: Dual listed company voting shares are not treated as ownership interests: see section 125‑60.
Note 3: Fractional interests will generally not affect your ability to choose a roll‑over.
Example: To continue the example from subsection (1), Company A concludes, given the circumstances of the demerger, that the market values of Peter's and the other shareholders' shares in A and B are expected to be in proportion with their original interests in Company A, and advises the shareholders of this position.
 (3) In working out whether an original owner complies with subsection (2):
 (a) disregard *ownership interests that are original interests the owner owns in the *demerged entity; and
 (b) an anticipated reasonable approximation of the *market value of ownership interests is sufficient.
Example: An anticipated reasonable approximation of market values of ownership interests may include:
                  * valuations provided to shareholders in scheme documents;
                  * the price selected for use under a sale facility;
 and may be made by reference to long‑term value.

Exception: off‑market buy‑backs
 (4) A buy‑back of *shares that is an off‑market purchase for the purposes of Division 16K of Part III of the Income Tax Assessment Act 1936 is not a *demerger.

Exception: roll‑over available under another provision
 (5) Circumstances where an owner of original interests can obtain a roll‑over under a provision of this Act outside this Division for all of the CGT events that happened to the owner's original interests under the circumstances cannot be a demerger.
Note: An owner might be able to obtain a roll‑over for the CGT events under Subdivision 124‑E, 124‑G, 124‑H or 124‑M.

Meaning of demerged entity
 (6) An entity that is a former member of a *demerger group is a demerged entity if, under a *demerger that happens to the group, *ownership interests in the entity are acquired by:
 (a) shareholders in the *head entity of the group; or
 (b) unitholders or holders of interests in the head entity of the group.

Meaning of demerging entity
 (7) An entity that is a member of a *demerger group just before the *CGT event referred to in section 125‑155 happens is a demerging entity if, under