Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:16_1:p7
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 16 cl 1 (pt 7/12)
Character Range: 458952–461622

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 a *demerger that happens to the group:
 (a) the entity (either alone or together with other members of the demerger group)*dispose of at least 80% of their total *ownership interests in another member of the demerger group to owners of original interests in the *head entity of the demerger group; or
 (b) at least 80% of the total ownership interests of that entity and of other members of the demerger group in another member of the demerger group end and new interests are issued to owners of original interests in the head entity; or
Note: CGT event C2 and CGT event C3 are the only relevant CGT events.
 (c) the demerged entity issues sufficient new ownership interests in itself with the result that owners of original interests in the head entity own at least 80% of the total ownership interests in the demerged entity; or
 (d) some combination of the processes referred to in paragraphs (a), (b) and (c) happens with the effect that members of the demerger group stop owning at least 80% of the total ownership interests owned by members of the demerger group in another member of the group.

125‑75  Exceptions to subsection 125‑70(2)

Employee share schemes
 (1) In working out whether the requirements in subsection 125‑70(2) are met, disregard each of the *ownership interests described in subsections (2) and (3) if, just before the *demerger, those interests (taking into account either or both of their number and value) represented not more than 3% of the total *ownership interests in the entity.
 (2) An *ownership interest in a company that is owned by an entity is disregarded under subsection (1) if the ownership interest:
 (a) is:
 (i) a *qualifying share or a *qualifying right *acquired under an *employee share scheme; or
 (ii) a *share acquired under a *scheme to which section 26AAC of the Income Tax Assessment Act 1936 applies; and
 (b) is not a fully‑paid ordinary share.
 (3) An *ownership interest in a trust that is owned by an entity is disregarded under subsection (1) if the ownership interest:
 (a) would be a *qualifying share or a *qualifying right *acquired under an *employee share scheme if Division 13A of Part III of the Income Tax Assessment Act 1936 applied to ownership interests in a trust; and
 (b) is not a fully‑paid unit.

Adjusting instruments
 (4) In working out whether the requirements in subsection 125‑70(2) are met, disregard each of the *ownership interests described in subsection (5)