Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p9
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 9/59)
Character Range: 2555286–2558042

Partial roll‑over
124‑795 Exceptions
124‑800 Interest received for pre‑CGT interest
124‑810 Certain companies and trusts not regarded as having 300 members or beneficiaries

Operative provisions

124‑780  Replacement of shares
 (1) There is a roll‑over if:
 (a) an entity (the original interest holder) exchanges:
 (i) a *share (the entity's original interest) in a company (the original entity) for a share (the holder's replacement interest) in another company; or
 (ii) an option, right or similar interest (also the holder's original interest) issued by the original entity that gives the holder an entitlement to acquire a share in the original entity for a similar interest (also the holder's replacement interest) in another company; and
 (b) the exchange is in consequence of a single *arrangement that satisfies subsection (2) or (2A); and
 (c) the conditions in subsection (3) are satisfied; and
 (d) if subsection (4) applies, the conditions in subsection (5) are satisfied.
Note 1: There are some exceptions: see section 124‑795.
Note 2: The original interest holder can obtain only a partial roll‑over if the capital proceeds for its original interest include something other than its replacement interest: see section 124‑790.
Note 3: A trustee who gets a roll‑over under this Subdivision for an original interest consisting of shares issued as part of a demutualisation may be eligible for a further roll‑over under Subdivision 126‑E when a beneficiary becomes absolutely entitled to the replacement shares.
Example 1: You can get a roll‑over if you exchange your shares in one entity for shares in another entity or if you exchange options in one entity for options in another entity. You cannot get a roll‑over if you exchange options for shares.
Example 2: Examples of arrangements that could be involved include:
• a company takeover, whether or not it is regulated by the Corporations Act 2001, resulting in a company owning 80% or more of another company's shares.
• a scheme of arrangement governed by the Corporations Act 2001 that involves a cancellation of some interests in an original entity resulting in another entity owning 80% or more of the interests in the original entity.

Conditions for arrangement
 (2) The *arrangement must:
 (a) result in:
 (i) a company (the acquiring entity) that is not a member of a *wholly‑owned group becoming the owner of 80% or more of the *voting shares in the original entity; or
 (ii) a company (also an acquiring entity) that is a member of such a group increasing the percentage of voting shares that it owns in the original entity, and that company or members of the group becoming the owner of 80% or more of those shares; and
 (b) be one in which at least all owners of *voting shares