Document ID: chunk:federal_register_of_legislation:C2010C00406:clause:3_1:p5
Version: federal_register_of_legislation:C2010C00406
Segment Type: clause
Provision Reference: sch 3 cl 1 (pt 5/12)
Character Range: 42788–45638

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 issued to an entity covered by section 316‑115.

 (2) The formula is:

Time of acquisition

 (3) The entity is taken to have *acquired the *CGT asset at the time it is issued.

316‑110  Demutualisation assets

 (1) This section covers a *CGT asset that:
 (a) is:
 (i) a *share in the *friendly society; or
 (ii) a right to *acquire a share in the friendly society; or
 (iii) a share in an entity that owns all of the shares in the friendly society; or
 (iv) a right to acquire a share in an entity mentioned in subparagraph (iii); and
 (b) is issued under the demutualisation; and
 (c) is issued in connection with:
 (i) the variation or abrogation of rights attaching to or consisting of an interest affected by demutualisation (see paragraph 316‑55(1)(b)); or
 (ii) the conversion, cancellation, extinguishment or redemption of an interest affected by demutualisation.

Exclusion for rights with an exercise price

 (2) Despite subsection (1), this section does not cover a right to *acquire a *share in an entity if the holder of the