Document ID: chunk:federal_register_of_legislation:C2005A00147:clause:5_26aad:p1
Version: federal_register_of_legislation:C2005A00147
Segment Type: clause
Provision Reference: sch 5 cl 26AAD (pt 1/3)
Character Range: 148185–150864

26AAD  The effect of 100% takeovers and restructures on the operation of section 26AAC

Treating acquisitions as continuations of existing shares etc.

 (1) To the extent that:
 (a) a taxpayer acquires:
 (i) shares in a company (the new company) that can reasonably be regarded as matching shares in another company (the old company) that the taxpayer had acquired under a scheme for the acquisition of shares by employees; or
 (ii) rights to acquire shares in a company (the new company) that can reasonably be regarded as matching rights in another company (the old company) that the taxpayer had acquired under a scheme for the acquisition of shares by employees; and
 (b) the acquisition occurs in connection with a 100% takeover, or a restructure, of the old company; and
 (c) as a result of the takeover or restructure, the taxpayer ceased to hold the shares or rights in the old company;
then, if the conditions in subsections (3) to (5) are met, the matching shares or rights are treated, for the purposes of section 26AAC, as if they were a continuation of the shares or rights in the old company.

Note: In determining to what extent something can reasonably be regarded as matching shares or rights in the old company, one of the factors to consider is the respective market values of that thing and of those shares or rights.

Treating acquisitions as disposals of existing shares etc.

 (2) However, to the extent that, in connection with the takeover or restructure, the taxpayer acquires anything that:
 (a) can reasonably be regarded as matching any shares or rights in the old company that the taxpayer had acquired under a scheme for the acquisition of shares by employees; but
 (b) is not a matching share or right to which subsection (1) applies;
the taxpayer is treated, for the purposes of section 26AAC, as having disposed of shares, or disposed of rights (other than by exercising them), that the taxpayer held, under a scheme for the acquisition of shares by employees, in the old company immediately before the takeover or restructure.

Conditions for the continuation of shares or rights

 (3) The first condition is that, immediately before the takeover or restructure, the taxpayer held shares, or rights to acquire shares, in the old company under a scheme for the acquisition of shares by employees.

 (4) The second condition is that:
 (a) to the extent that the matching shares or rights are shares, they are ordinary shares; or
 (b) to the extent that the matching shares or rights are rights, they are rights to acquire ordinary shares.

 (5) The third condition is that the matching shares or rights are subject to:
 (a) the same conditions