Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:16_1:p8
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 16 cl 1 (pt 8/12)
Character Range: 461364–464153

Act 1936 applied to ownership interests in a trust; and
 (b) is not a fully‑paid unit.

Adjusting instruments
 (4) In working out whether the requirements in subsection 125‑70(2) are met, disregard each of the *ownership interests described in subsection (5) (adjusting instruments) if, just before the *demerger, those interests represented not more than 10%, or such greater percentage (not exceeding 17%) as is prescribed, of the ownership interests in the entity.
 (5) An *ownership interest in a *listed public company or a *listed widely held trust that is the *head entity of a *demerger group is disregarded under subsection (4) if:
 (a) the adjusting instrument was issued on terms that ensure that its value is not adversely affected by an *arrangement undertaken by the company or trust in relation to other ownership interests in the company or trust; and
 (b) if the adjusting instrument can be converted into an ordinary *share in the company or an ordinary unit in the trust, any conversion will occur on a basis:
 (i) that is set out in the terms of the issue of the instrument; and
 (ii) that is adjusted to take into account a capital reduction or a capital reconstruction; and
 (c) before conversion, the owner of the adjusting instrument does not have a right to participate in distributions of profit or capital except as set out in the terms of the issue of the instrument; and
 (d) the adjusting instrument deals with the effect of a *demerger that happens to the demerger group on the value of the instrument.
Example: Some examples of adjusting instruments are:
                  * convertible preference shares, including reset preference shares;
                  * convertible notes;
                  * partly paid shares where the paid‑up amount is adjusted to reflect a capital reduction.

Additional exceptions
 (6) The regulations may provide that, in working out whether the requirements in subsection 125‑70(2) are met, other *ownership interests of a kind specified in the regulations are to be disregarded if, just before the *demerger, those interests represented not more than a prescribed percentage of the ownership interests in the entity.
 (7) However, the total percentage of *ownership interests to be disregarded under this section must not exceed 20% of the ownership interests in the entity.

125‑80  What is the roll‑over?
 (1) If you choose the roll‑over, a *capital gain or *capital loss you make from a *CGT event happening under the *demerger to an original interest you own is disregarded.
 (2) If you choose the roll‑over, the first element of the *cost base and *reduced cost base of:
 (a) each new interest that you are not taken to have *acquired before 20 September 1985; and
 (b) if not all of your original interests ended under