Document ID: chunk:federal_register_of_legislation:C2010C00184:clause:2_5:p1
Version: federal_register_of_legislation:C2010C00184
Segment Type: clause
Provision Reference: sch 2 cl 5 (pt 1/2)
Character Range: 105892–108593

5  At the end of Division 124
Add:

Subdivision 124‑P—Exchange of a membership interest in an MDO for a membership interest in another MDO

Guide to Subdivision 124‑P

124‑975  What this Subdivision is about

      You can choose a roll‑over if you exchange your interest as a member of an MDO for an interest as a member of another MDO.
      You can only choose the roll‑over if you would have made a capital gain from the exchange.

Table of sections

Operative provisions

124‑980 Exchange of membership interests in an MDO
124‑985 What the roll‑over is for post‑CGT interests
124‑990 Partial roll‑over
124‑995 Pre‑CGT interests

Operative provisions

124‑980  Exchange of membership interests in an MDO

 (1) There is a roll‑over if:
 (a) an entity exchanges:
 (i) an interest (the original interest) in an *MDO (the original MDO) as a member of the original MDO; for
 (ii) a similar interest (the replacement interest) in another MDO (the new MDO) as a member of the new MDO; and
 (b) both the original MDO and the new MDO are companies limited by guarantee; and
 (c) the exchange is in consequence of a single *arrangement that satisfies subsection (3); and
 (d) apart from the roll‑over, the entity would make a *capital gain from a *CGT event happening in relation to its original interest; and
 (e) the entity chooses to obtain the roll‑over; and
 (f) the entity acquired the original interest on or after 20 September 1985.

Note: The entity can obtain only a partial roll‑over if the capital proceeds for its original interest include something other than its replacement interest: see section 124‑990.

 (2) In working out whether an original interest is exchanged for a similar interest, disregard a difference that consists only of a right to receive distributions of income or capital.

Conditions for arrangement

 (3) The *arrangement must:
 (a) result in the new *MDO becoming the sole *member of the original MDO; and
 (b) be one in which participation was available on substantially the same terms for all of the holders of interests as members of the original MDO of a particular type.

124‑985  What the roll‑over is for post‑CGT interests

 (1) A *capital gain the entity makes from an original interest *acquired on or after 20 September 1985 is disregarded.

 (2) The entity works out the first element of the *cost base of each replacement interest the entity received as a result of the exchange by reasonably attributing to it the cost base (or the part of it) of the entity's original interest for which it was exchanged and for which the entity obtained the roll‑over.

 (3) In applying subsection (2), the entity reduces (but not below zero) the *cost base of the