Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p38
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 38/79)
Character Range: 4933715–4936372

policy holder
 (1) This section applies in relation to a *capital gain from a *CGT event if:
 (a) the CGT event happens in relation to an asset held by the trustee of a lost policy holders trust; and
 (b) section 315‑150 does not apply to the CGT event.
 (2) If this section applies:
 (a) sections 115‑215 and 115‑220 do not apply in relation to the *capital gain; and
 (b) for the purposes of this Act, the trustee is taken to be *specifically entitled to all of the capital gain.

315‑160  Subdivision 126‑E does not apply to lost policy holders trust
  Subdivision 126‑E does not apply in relation to a demutualisation to which this Division applies.

Subdivision 315‑D—Special cost base rules for certain shares and rights in holding companies

Table of sections
315‑210 Cost base for shares and rights in certain holding companies

315‑210  Cost base for shares and rights in certain holding companies
 (1) This section applies in relation to a *CGT asset that is a demutualisation asset if:
 (a) the demutualisation asset is:
 (i) a share in an entity mentioned in subparagraph 315‑85(1)(a)(iii); or
 (ii) a right to *acquire a share in an entity mentioned in that subparagraph; and
 (b) the entity owns other assets in addition to the shares in the demutualising health insurer; and
 (c) the share or right is issued to a participating policy holder or the trustee of a lost policy holders trust.
This section applies despite sections 315‑80 and 315‑145.

Cost base adjustment
 (2) The first element of the *cost base and *reduced cost base of the *CGT asset is worked out under the method statement.

      Method statement
           Step 1. Start with the *market value of the demutualising health insurer on the day the asset is issued.
           Step 2. Divide the result of step 1 by the sum of:

                (a) the number of shares in the entity that are issued under the demutualisation; and
                (b) the number of shares in the entity that can be *acquired under rights that are demutualisation assets issued under the demutualisation.

           Step 3. The result of step 2 is the first element of the *cost base and *reduced cost base of the asset, unless the asset is a right.
           Step 4. If the asset is a right, multiply the result of step 2 by the number of shares that can be *acquired under the right. The result is the first element of the *cost base and *reduced cost base of the asset.
Example: Wellbeing Health demutualises on 1 April 2008 and has a market value of $400 million on that day. It distributes its accumulated mutual surplus in the form of rights to acquire shares in its holding company