Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p8
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 8/18)
Character Range: 2705386–2708132

loss the transferor makes from the transfer of the asset is disregarded.
 (4) If the transferor *acquired the asset on or after 20 September 1985:
 (a) the first element of the asset's *cost base (in the hands of the transferee) is the asset's cost base (in the hands of the transferor) at the time the transferee acquired it; and
 (b) the first element of the asset's *reduced cost base (in the hands of the transferee) is worked out similarly.
 (5) If the transferor *acquired the asset before 20 September 1985, the transferee is taken to have acquired it before that day.
Note: A capital gain or loss you make from a CGT asset you acquired before 20 September 1985 is generally disregarded: see Division 104. This exemption is removed in some situations: see Division 149.

Subdivision 126‑E—Entitlement to shares after demutualisation and scrip for scrip roll‑over

Guide to Subdivision 126‑E

126‑185  What this Subdivision is about
      This Subdivision sets out when there is a roll‑over for a CGT event that happens because a beneficiary becomes absolutely entitled to a share as against the trustee where the trustee obtained a roll‑over under Subdivision 124‑M following a demutualisation.

Table of sections

Operative provisions
126‑190 When there is a roll‑over
126‑195 Consequences of roll‑over

Operative provisions

126‑190  When there is a roll‑over
  There is a roll‑over if:
 (a) an insurance company demutualises; and
 (b) the trustee of a trust holds a *share issued under the demutualisation in trust for an entity to whom the share would have been issued if the entity could, and were in a position to, prove the entity's entitlement to the share; and
 (c) the trustee obtains a roll‑over under Subdivision 124‑M of this Act (Scrip for scrip roll‑over) for the share because the trustee exchanges the share for a share (the replacement share) in another company (whether or not the trustee receives something in addition to the replacement share); and
 (d) a *CGT event happens in relation to the replacement share because the entity becomes absolutely entitled to the share as against the trustee.
Note: This Subdivision does not apply to the demutualisation of a private health insurer: see section 315‑160.

126‑195  Consequences of roll‑over
 (1) A *capital gain or *capital loss the trustee makes from the *CGT event is disregarded.
 (2) The first element of the *cost base of the replacement share for the entity is the cost base of the replacement share in the hands of the trustee just before the *CGT event happened. The first element of the *reduced cost base of the replacement share for the entity is worked out similarly.
Example: The JB mutual insurance company demutualises, issuing shares in JB Limited to