Document ID: chunk:federal_register_of_legislation:C2010C00615:clause:5_4:p1
Version: federal_register_of_legislation:C2010C00615
Segment Type: clause
Provision Reference: sch 5 cl 4 (pt 1/8)
Character Range: 305860–308599

4  Section 124‑780
Repeal the section, substitute:

124‑780  Replacement of shares

 (1) There is a roll‑over if:
 (a) an entity (the original interest holder) exchanges:
 (i) a *share (the entity's original interest) in a company (the original entity) for a share (the holder's replacement interest) in another company; or
 (ii) an option, right or similar interest (also the holder's original interest) issued by the original entity that gives the holder an entitlement to acquire a share in the original entity for a similar interest (also the holder's replacement interest) in another company; and
 (b) the exchange is in consequence of a single *arrangement that satisfies subsection (2); and
 (c) the conditions in subsection (3) are satisfied; and
 (d) if subsection (4) applies, the conditions in subsection (5) are satisfied.

Note 1: There are some exceptions: see section 124‑795.

Note 2: The original interest holder can obtain only a partial roll‑over if the capital proceeds for its original interest includes something other than its replacement interest: see section 124‑790.

Example 1: You can get a roll‑over if you exchange your shares in one entity for shares in another entity or if you exchange options in one entity for options in another entity. You cannot get a roll‑over if you exchange options for shares.

Example 2: Examples of arrangements that could be involved include:
                  *   a company takeover, whether or not it is regulated by the Corporations Law, resulting in a company owning 80% or more of another company's shares.
                  *   a scheme of arrangement governed by the Corporations Law that involves a cancellation of some interests in an original entity resulting in another entity owning 80% or more of the interests in the original entity.

Conditions for arrangement

 (2) The *arrangement must:
 (a) result in:
 (i) a company (the acquiring entity) that is not a member of a *wholly‑owned group becoming the owner of 80% or more of the *voting shares in the original entity; or
 (ii) a company (also an acquiring entity) that is a member of such a group increasing the percentage of voting shares that it owns in the original entity, and that company or members of the group becoming the owner of 80% or more of those shares; and
 (b) be one in which at least all owners of *voting shares in the original entity (except a company referred to in paragraph (a)) could participate; and
 (c) be one in which participation was available on substantially the same terms for all of the owners of interests of a particular type in the original entity.

Note 1: The 80% or more requirement is satisfied if the acquiring entity ends up owning at least 80% of the voting shares