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Demutualisation of non-insurance mutual entities.



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Press Release

SENATOR

THE HON ROD KEMP

ASSISTANT TREASURER

 

NO.56

 

DEMUTUALISATION OF NON-INSURANCE MUTUAL ENTITIES

 

 

The Assistant Treasurer, Senator Rod Kemp, today announced that the Government will introduce legislative amendments that will allow a non-insurance mutual entity to apply a new demutualisation method. This will allow shares in the demutualised entity to be issued to members of the mutual entity and to a holding company where all the shares in the holding company must be issued to members of the mutual entity.

 

The Government has already legislated to ensure that members of mutual entities, entitled to receive shares when the organisation demutualises, do not face possible problems such as double taxation of capital gains.

 

Futher legislative action is necessary to ensure that similar problems do not affect members of mutual entities that prefer to use the new demutualisation method, which is a hybrid of two existing demutualisation methods.

 

The Government’s amendments will ensure that no capital gains tax (CGT) taxing event arises as a result of members giving up their membership nghts when a mutual entity demutualises.

 

The Government will prepare the legislative amendments for introduction to Parliament as soon as possible. The amendments will have effect from the date of this announcement.

 

 

CANBERRA

17 November, 1999.

 

 

Media contacts:

Tony Regan Australian Taxation Office (02) 6263 4404

Richard Allsop Assistant Treasurer’s Office (03) 9650 7274

 

mm  1999-11-18  15:29