Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p40
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 40/79)
Character Range: 4938700–4941651

taxation consequences of issue of demutualisation assets etc.
 (1) An amount of *ordinary income or *statutory income of an entity to which subsection (2) applies is not assessable and not *exempt income if:
 (a) the amount would otherwise be included in the ordinary income or statutory income of the entity only because a demutualisation asset was issued to the entity; or
 (b) the amount is a payment made to the entity, under a demutualisation to which this Division applies, in connection with:
 (i) the variation or abrogation of rights attaching to or consisting of a *CGT asset covered by section 315‑20; or
 (ii) the conversion, cancellation, extinguishment or redemption of such a CGT asset.
 (2) This subsection applies to an entity that:
 (a) is, or has been, a policy holder (within the meaning of the Private Health Insurance (Prudential Supervision) Act 2015) of, or another person insured through, the demutualising health insurer; or
 (b) is issued with the demutualisation asset, or receives the payment, because of the death of a policy holder mentioned in paragraph (a).

Division 316—Demutualisation of friendly society health or life insurers

Table of Subdivisions
 Guide to Division 316
316‑A Application
316‑B Capital gains and losses connected with the demutualisation
316‑C Cost base of shares and rights issued under the demutualisation
316‑D Lost policy holders trust
316‑E Special CGT rules for legal personal representatives and beneficiaries
316‑F Non‑CGT consequences of the demutualisation

Guide to Division 316

316‑1  What this Division is about
      Special tax consequences follow the demutualisation of a friendly society that provides health insurance or life insurance, or has a wholly‑owned subsidiary that does.

Subdivision 316‑A—Application

Table of sections
316‑5 Application of this Division

316‑5  Application of this Division
  This Division applies in relation to a demutualisation of a *friendly society if:
 (a) the society is, or has a *wholly‑owned subsidiary (a health/life insurance subsidiary) that is:
 (i) a private health insurer as defined in the Private Health Insurance (Prudential Supervision) Act 2015; or
 (ii) a company registered under section 21 of the Life Insurance Act 1995; and
 (b) the society does not have capital divided into *shares held by its *members; and
 (c) after the demutualisation the society is to be carried on for the object of securing a profit or pecuniary gain for its *members.

Subdivision 316‑B—Capital gains and losses connected with the demutualisation

Guide to Subdivision 316‑B

316‑50  What this Subdivision is about
      Disregard capital gains and losses made by any entity from a CGT event happening under the demutualisation, unless the entity:

                (a) is or has been a member of the friendly society or insured through the society or any of its wholly‑owned subsidiaries; and
                (b) receives money for the event.