Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:16_1:p2
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 16 cl 1 (pt 2/12)
Character Range: 446790–449422

(d) under the demerger, a *CGT event happens to your original interest and you *acquire a new or replacement interest (your new interest) in the *demerged entity.
Note 1: Section 125‑80 sets out what the roll‑over is.
Note 2: You have to make cost base adjustments even if there is no CGT event: see section 125‑90.
Example: Peter owns shares (his original interests) in Company A, a public company. Company B is a wholly owned subsidiary of Company A. Company A announces a demerger utilising a proportionate capital reduction and the disposal of all its shares in Company B to its 320,000 shareholders. Following the demerger all of the shareholders in Company A, including Peter, will own all of the shares in Company B (their new interests).
 (2) You cannot choose to obtain a roll‑over under this Subdivision for an original interest if:
 (a) you are a foreign resident; and
 (b) the new interest you *acquire under the *demerger in exchange for that original interest does not have the *necessary connection with Australia just after you acquire it.
Note: Section 136‑25 tells you when an asset has the necessary connection with Australia.

125‑60  Meaning of ownership interest and related terms
 (1) An ownership interest in a company or trust is:
 (a) for a company, a *share in the company or an option, right or similar interest issued by the company that gives the owner an entitlement to *acquire a share in the company; and
 (b) for a trust, a unit or other interest in the trust or an option, right or similar interest issued by the trustee that gives the owner an entitlement to acquire a unit or other interest in the trust.
 (2) However, this Subdivision applies to a *dual listed company voting share in a company as if it were not an ownership interest if there are not more than 5 of those *shares in the company.
 (3) A dual listed company voting share is a *share in a company:
 (a) issued:
 (i) in the *head entity of a *demerger group; and
 (ii) as part of a *dual listed company arrangement; and
 (iii) mainly for the purpose of ensuring that shareholders of both companies involved in the arrangement vote as a single decision‑making body on matters affecting them; and
 (b) that does not carry rights to financial entitlements (except the return of the amount paid up on the share and a dividend that is the equivalent of a dividend paid on an ordinary share).
 (4) A dual listed company arrangement is an *arrangement under which 2 publicly listed companies, while maintaining their separate legal entity status, shareholdings and listings, align their strategic directions and the economic interests of