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Tax and Superannuation Laws Amendment (2015 Measures No . 4) Bill 2015
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Schedule 1 Scrip for scrip roll-over

   

Income Tax » Assessment Act 1997

1  Subsection 104-25(5) (note 4)

Repeal the note.

2  Section 112-53 (table item 2, column headed “In this situation:”)

Omit “an ultimate holding company under that arrangement from a member of its wholly-owned”, substitute “a member of a wholly-owned group under that arrangement from another member of the”.

3  Paragraph 124-780(3)(d)

Omit “arrangement”, substitute “ * arrangement”.

4  At the end of subsection 124-780(3)

Add:

             ; and (f)  if an acquiring entity is a member of a wholly-owned group— « no » member of the group issues equity (other than a replacement interest), or owes new debt, under the arrangement:

                              (i)  to an entity that is not a member of the group; and

                             (ii)  in relation to the issuing of the replacement interest.

5  Subparagraphs 124-781(1)(a)(i) and (ii)

After “ acquiring entity ”, insert “and the replacement entity ”.

« 6 »   Subsection 124-782(1) (note 2)

Omit “an ultimate holding company by an acquiring entity”, substitute “a member of an acquiring wholly-owned group by another member of the group”.

7  Subsections 124-783(9) and (10)

Omit “acquiring entity” (wherever occurring), substitute “replacement entity”.

8  Section 124-784

Repeal the section, substitute:

124-783A   Rights that affect stakes

             (1)  An entity has a significant stake in another entity if:

                     (a)  the first entity has one or more * stake options in the other entity; and

                     (b)  the first entity would have such a stake (under section 124-783) if the first entity acquired * stake interests in the other entity under any of those stake options.

Note:       Paragraph (b) is satisfied if there are any circumstances (e.g. the first entity exercises some but not all of the stake options) in which the first entity would have a significant stake in the other entity, even if in other circumstances the first entity would not have such a stake.

             (2)  An entity, or 2 or more entities, have a common stake in the original entity just before the * arrangement started and in the replacement entity just after the arrangement was completed if:

                     (a)  the entities:

                              (i)  had one or more * stake options in the original entity before the arrangement started; or

                             (ii)  have one or more stake options in the replacement entity; and

                     (b)  the entities would have such stakes (under section 124-783) if:

                              (i)  the entities had acquired * stake interests in the original entity under any of the stake options mentioned in subparagraph (a)(i); or

                             (ii)  the entities acquired stake interests in the replacement entity under some or all of the stake options mentioned in subparagraph (a)(ii).

             (3)  Something is a stake option an entity has in another entity if it gives the first entity, or its * associates, a right to acquire the following ( stake interests ):

                     (a)  if the other entity is a company:

                              (i)  voting rights in the company; or

                             (ii)  the right to receive any part of any * dividends that the company may pay; or

                            (iii)  the right to receive any part of any distribution of capital of the company;

                     (b)  if the other entity is a trust—the right to receive any part of any distribution to beneficiaries of the trust of income or capital of the trust;

and the acquisition could occur before the end of 5 years after the * arrangement was completed.

Example 1: An option.

Example 2: A share that gives a voting right that is temporarily supressed.

             (4)  For the purposes of subsection (1), treat the reference in subparagraph (3)(a)(i) to voting rights as being a reference to * shares carrying voting rights.

             (5)  This section does not limit subsections 124-783( « 6 » ) to (10).

124-784   Cost base of equity or debt given within acquiring group

Purpose

             (1)  This section allocates an appropriate * cost base to equity issued, or new debt owed, under the * arrangement, by a member of a * wholly-owned group to another member (the recipient ) of the group, if:

                     (a)  the acquiring entity is a member of the group; and

                     (b)  the cost base of an original interest was transferred or allocated under section 124-782 because the original interest holder is a * significant stakeholder or a * common stakeholder for the arrangement.

Allocation of cost base

             (2)  The first element of the * cost base of the equity or debt for the recipient is that part of the cost base of the original interest transferred or allocated under section 124-782 as:

                     (a)  may be reasonably allocated to the equity or debt; and

                     (b)  is not more than the * market value of the equity or debt just after the * arrangement was completed.

9  Subparagraph 124-784A(1)(a)(i)

After “section 124-780”, insert “or 124-781”.

10  Subsection 124-784A(2) (method statement, step 3)

Repeal the step, substitute:

Step 3.   Add up the * market value at the completion time of all of the:

               (a)     if the replacement entity is a company— * shares * on issue by the replacement entity; and

              (b)     if the replacement entity is a company—options, rights and similar interests issued by the replacement entity that give the holder an entitlement to acquire a share in the replacement entity at or after the completion time; and

               (c)     if the replacement entity is a trust—units or other interests in the replacement entity; and

              (d)     if the replacement entity is a trust—options, rights or similar interests issued by the replacement entity that gives the holder an entitlement to acquire a unit or other interest in the replacement entity at or after the completion time.

11  Section 124-784C

Repeal the section, substitute:

124-784C   Cost base of equity or debt given within acquiring group

Purpose

             (1)  This section allocates an appropriate * cost base to equity issued, or new debt owed, under the * arrangement by a member of a * wholly-owned group to another member (the holder ) of the group, if:

                     (a)  an acquiring entity is a member of the group; and

                     (b)  the cost base of the acquiring entity for a qualifying interest was worked out under section 124-784B.

Allocation of cost base

             (2)  The first element of the * cost base of the equity or debt for the holder is that part of the cost base of the qualifying interest worked out under section 124-784B as:

                     (a)  may be reasonably allocated to the equity or debt; and

                     (b)  is not more than the * market value of the equity or debt at the completion time.

12  Subsection 995-1(1) (definition of common stake )

Omit “section 124-783”, substitute “sections 124-783 and 124-783A”.

13  Subsection 995-1(1) (definition of significant stake )

Omit “section 124-783”, substitute “sections 124-783 and 124-783A”.

14  Subsection 995-1(1)

Insert:

stake interest has the meaning given by subsection 124-783A(3).

stake option has the meaning given by subsection 124-783A(3).

15  Application of amendments

The amendments made by this Schedule apply in relation CGT events happening after 7.30 pm, by legal time in the Australian Capital Territory, on 8 May « 2012 .