Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p9
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 9/18)
Character Range: 2707888–2710722

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 its policyholders. It is unable to locate some of its policyholders so it establishes a trust and issues shares to the trustee on behalf of those policyholders. Steve is one of those policyholders (being potentially entitled to 50 shares).
 JB Limited is taken over by PVDM Limited. Members of JB are issued with 2 shares in PVDM for each share they have in JB. The trustee obtains a roll‑over under Subdivision 124‑M for the exchange. Each PVDM share held by the trustee has a cost base and reduced cost base of $15.
 Steve writes to the trustee and proves his entitlement to the shares held in trust for him.
 There is a roll‑over under this Subdivision so that any capital gain or loss made by the trustee is disregarded. The first element of the cost base and reduced cost base of each of Steve's PVDM shares is $15.

Subdivision 126‑G—Transfer of assets between certain trusts

Guide to Subdivision 126‑G

126‑215  What this Subdivision is about
      Roll‑overs may be available when CGT assets are transferred between certain trusts.

Table of sections

Operative provisions
126‑220 Object of this Subdivision
126‑225 When a roll‑over may be chosen
126‑230 Beneficiaries' entitlements not be discretionary etc.
126‑235 Exceptions for roll‑over
126‑240 Consequences for the trusts
126‑245 Consequences for beneficiaries—general approach for working out cost base etc.
126‑250 Consequences for beneficiaries—other approach for working out cost base etc.
126‑255 No other cost base etc. adjustment for beneficiaries
126‑260 Giving information to beneficiaries
126‑265 Interest sale facilities

Operative provisions

126‑220  Object of this Subdivision
  The object of this Subdivision is to ensure that CGT considerations are not an impediment to the restructure of trusts, whilst ensuring that subsequent changes to the manner and extent to which beneficiaries can benefit from the trusts are subject to appropriate tax consequences.

126‑225  When a roll‑over may be chosen
 (1) A roll‑over may be chosen for a *CGT asset (the roll‑over asset) if:
 (a) the trustee of a trust (the transferring trust):
 (i) creates a trust (the receiving trust), by declaration or settlement, over one or more CGT assets that include the roll‑over asset; or
 (ii) transfers the roll‑over asset to an existing trust (the receiving trust);
  at a particular time (the transfer time); and
 (b) if subparagraph (a)(ii) applies—the receiving trust has no CGT assets immediately before the transfer time, other than any or all of the following:
 (i) small amounts of cash or debt;
 (ii) its rights under an