Document ID: chunk:federal_register_of_legislation:C2010C00577:clause:2_1:p2
Version: federal_register_of_legislation:C2010C00577
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 2/4)
Character Range: 33988–36642

transferee.

 (3) The transferee must not be an *exempt entity.

 (4) The transferee must be a company that:
 (a) has never carried on commercial activities; and
 (b) has no *CGT assets other than small amounts of cash or debt; and
 (c) has no losses of any kind.

Example: It could be a shelf company.

 (5) Subsection (4) does not apply to a transferee that is the trustee of the transferor.

 (6) Just after the end of the *trust restructuring period:
 (a) each entity that owned interests in a transferor just before the start of the trust restructuring period must own replacement interests in the transferee in the same proportion as it owned those interests in that transferor; and
 (b) the *market value of the replacement interests each of those entities owns in the transferee must be at least substantially the same as the market value of the interests it owned in the transferor or transferors just before the start of the trust restructuring period.

Note: Any assets in the company just before the start of the trust restructuring period may affect the ability of owners of units or interests to comply with paragraph (6)(b).

 (7) For the purposes of subsection (6), ignore any *shares in the transferee that:
 (a) just before the start of the *trust restructuring period, were owned by entities who together owned no more than 5 shares; and
 (b) just after the end of that period, represented such a low percentage of the total market value of all the shares that it is reasonable to treat other entities as if they owned all the shares in the transferee.

Example: To continue the example in subsection 124‑855(2), assume that Jonathon Pty Ltd was a shelf company organised for Matthew and Jaclyn by their solicitor, Indira.

 Indira owned the 2 shares in Jonathon Pty Ltd before the trust restructuring period. The company issues Matthew and Jaclyn 5,000 shares each.

 In these circumstances, it is reasonable to treat Matthew and Jaclyn as if they owned all the shares in Jonathon Pty Ltd.

 (8) The transferee must be an Australian resident.

124‑865  Entities both choose the roll‑over

  A roll‑over is only available for the transferor and transferee if both the transferor and transferee choose to obtain it.

Note 1: If they do so, the consequences for the transferor and transferee are set out in section 124‑875.

Note 2: An entity that owns a unit or interest in the transferor can also choose to obtain a roll‑over: see section 124‑870.

124‑870  Roll‑over for owner of units or interests in a trust

 (1) You can choose to obtain a roll‑over (whether or not the transferor and transferee choose to obtain a roll‑over, and