Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p48
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 48/59)
Character Range: 2651345–2654038

only because those entities own or owned original interests; and
 (e) the new interests acquired are:
 (i) if the head entity is a company—ownership interests in a company; or
 (ii) if the head entity is a trust—ownership interests in a trust; and
 (g) neither the original interests nor the new interests are in a trust that is a *non‑complying superannuation fund; and
 (h) the requirements of subsection (2) are met.
Example: To continue the example from subsection 125‑55(1), Peter owns 400 post‑CGT shares in Company A. Companies A and B are both members of a demerger group. Company A is the head entity of the demerger group and Company B is a demerger subsidiary.
 Company A proceeds to demerge 100% of its shares in Company B to its shareholders.
 Company A enters into a proportionate capital reduction, returning 40 cents per share to its ordinary shareholders. Peter is entitled to $160 (40c times 400 shares) under the capital reduction.
 For Peter, the capital reduction amount of $160 is compulsorily applied to acquire Company A's shares in Company B, at $6.75 (a discount of 10% to current market value). Company A rounds up the fractional amounts in calculating the number of whole shares to be distributed to each shareholder. This gives Peter 24 shares in Company B (160 divided by 6.75, rounded up to the nearest whole number).
Note: Acquiring new interests by an owner of original interests may include the allocation of the owner's entitlement to new interests to a nominee:
• to sell on the owner's behalf; or
• to hold pending the owner being located.
 (2) Each owner (an original owner) of original interests in the *head entity of the *demerger group must:
 (a) *acquire, under the *demerger, the same proportion, or as nearly as practicable the same proportion, of new interests in the *demerged entity as the original owner owned in the head entity just before the demerger; and
 (b) just after the demerger, have the same proportionate total *market value of *ownership interests in the head entity and demerged entity as the original owner owned in the head entity just before the demerger.
Note 1: There is an exception: see section 125‑75.
Note 2: Dual listed company voting shares are not treated as ownership interests: see section 125‑60.
Note 3: Fractional interests will generally not affect your ability to choose a roll‑over.
Example: To continue the example from subsection (1), Company A concludes, given the circumstances of the demerger, that the market values of Peter's and the other shareholders' shares in A and B are expected to be in proportion with their original interests in Company A, and advises the shareholders of this position.
 (3) In