Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p44
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 44/79)
Character Range: 4949145–4952120

insurance subsidiary of the friendly society, will continue to conduct *business and any other activity in the same way as before that day, and will not conduct any different business or other activity; and
 (b) that the demutualisation will not occur; and
 (c) that any health/life insurance subsidiary of the friendly society will continue to be a *wholly‑owned subsidiary of the friendly society.

Expenditure assumption
 (7) In working out the existing business value, assume that expenditure that the *friendly society and any of its health/life insurance subsidiaries will incur, in conducting *business, on recurring items after the demutualisation resolution day will be of the same kinds and amounts (increased to take account of any inflation) as it incurred in the accounting period, or part of an accounting period, ending on the demutualisation resolution day.

Friendly society's gains and losses

316‑75  Disregarding friendly society's capital gains and losses
  Disregard the *friendly society's *capital gain or *capital loss from a *CGT event that happens under the demutualisation.

Other entities' gains and losses

316‑80  Disregarding other entities' capital gains and losses
  Disregard an entity's *capital gain or *capital loss from a *CGT event that happens under the demutualisation if:
 (a) the entity is established solely for the purpose of participating in the demutualisation and is not a lost policy holders trust (see section 316‑155); and
 (b) the CGT event:
 (i) happens before or at the same time as the allocation or distribution of the accumulated surplus of the *friendly society; and
 (ii) is connected to that allocation or distribution.
Note: The allocation or distribution of the accumulated surplus could happen through an arrangement involving more than one transaction.

Subdivision 316‑C—Cost base of shares and rights issued under the demutualisation

Guide to Subdivision 316‑C

316‑100  What this Subdivision is about
      The value of the friendly society and its business affects cost bases of shares and certain rights issued under the demutualisation to:

                (a) entities that are or were members of the friendly society; or
                (b) entities insured through the society or its subsidiaries; or
                (c) successors of such entities; or
                (d) the trustee of the lost policy holders trust.

Table of sections
316‑105 Cost base and time of acquisition of shares and certain rights issued under demutualisation
316‑110 Demutualisation assets
316‑115 Entities to which section 316‑105 applies

316‑105  Cost base and time of acquisition of shares and certain rights issued under demutualisation

First element of cost base
 (1) The first element of the *cost base and *reduced cost base of a *CGT asset is the amount worked out using the formula in subsection (2) if:
 (a) the asset is a CGT asset (a demutualisation asset) covered by section 316‑110; and
 (b) the asset is