Document ID: chunk:federal_register_of_legislation:C2025C00014:section:121as:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 121AS (pt 1/7)
Character Range: 1047890–1053843

121AS  CGT consequences of demutualisation
  The table below sets out modifications of the application of Parts 3‑1 and 3‑3 (about CGT) of the Income Tax Assessment Act 1997 in respect of events that are described in, or relate to events that are described in, particular demutualisation methods.
TABLE 1—MODIFICATIONS OF CGT RULES
        Item Event                                                                                                                                                                                                                                                                                                                                                                          Modifications

  1 Any demutualisation method:
   Extinguishment of membership rights as mentioned in paragraph (1)(a) of sections 121AF to 121AL.                                                                                                                                                                                                                                                                             A capital gain or capital loss arising from a CGT event constituted by the extinguishment is disregarded.
  2 Demutualisation method 6:
   The whole of the life insurance business of the life insurance company is transferred to the other company as mentioned in paragraph 121AK(1)(b).                                                                                                                                                                                                                            Subdivision 126‑B of the Income Tax Assessment Act 1997 as in force immediately before 21 October 1999 (about roll‑overs for transfers) applies as if the life insurance company and the other company were members of the same wholly‑owned group within the meaning of that Act.
  3 Any demutualisation method:
   A person (the disposer) in the policyholder/ member group disposes of a right to have ordinary shares issued or distributed to the person, or the proceeds of sale of ordinary shares distributed to the person, as mentioned in paragraph 121AF(1)(b), 121AG(1)(c) or (d), 121AH(1)(c), 121AI(1)(e) or (f), 121AJ(1)(c) or (d), 121AK(1)(c) or (d) or 121AL(1)(c) or (d).     1. A capital loss that the disposer makes from the disposal is disregarded if the disposal takes place before the demutualisation listing day (see note 4 to this table).
                                                                                                                                                                                                                                                                                                                                                                                  2. For the purpose of working out whether the disposer made a capital gain, or made a capital loss (where modification 1 does not apply), from the disposal, he or she is taken:
                                                                                                                                                                                                                                                                                                                                                                                     (a) to have paid, as consideration for the acquisition of the right disposed of, an amount worked out using the following formula:
                                                                                                                                                                                                                                                                                                                                                                                     ; and

                                                                                                                                                                                                                                                                                                                                                                                     (b) to have paid the amount in paragraph (a), and to have acquired the right disposed of, on the demutualisation resolution day.
  4 Demutualisation method 2, 4, 5, 6 or 7:
   A person (the disposer) in the policyholder/member group disposes of an asset consisting of all or part of the person's interest in the trust property of the trustee mentioned in paragraph 121AG(1)(b) or (c), 121AI(1)(c) or (e), 121AJ(1)(c), 121AK(1)(c) or 121AL(1)(c).                                                                                                  1. A capital loss that the disposer makes from the disposal is disregarded if the disposal takes place before the demutualisation listing day (see note 4 to this table).
                                                                                                                                                                                                                                                                                                                                                                                  2. For the purpose of working out whether the disposer made a capital gain, or made a capital loss (where modification 1 does not apply), from the disposal, he or she is taken:
                                                                                                                                                                                                                                                                                                                                                                                     (a) to have paid, as consideration for