326‑90 Disposal by pre‑CGT member of a demutualisation share (other than a demutualisation original share) or an interest in such a share where member acquired membership rights by disposing of membership rights in another mutual entity
326‑95 Disposal by post‑CGT member of a demutualisation share (other than a demutualisation original share) or an interest in such a share
326‑100 Disposal by pre‑CGT member of a demutualisation original share or a non‑demutualisation bonus share, or an interest in such a share, before demutualisation listing day where member did not acquire membership rights by disposing of membership rights in another mutual entity
326‑105 Disposal by pre‑CGT member of a demutualisation original share or a non‑demutualisation bonus share, or an interest in such a share, on or after demutualisation listing day where member did not acquire membership rights by disposing of membership rights in another mutual entity
326‑110 Disposal by pre‑CGT member of a demutualisation original share or a non‑demutualisation bonus share, or an interest in such a share, where member acquired membership rights by disposing of membership rights in another mutual entity
326‑115 Disposal by post‑CGT member of a demutualisation original share or a non‑demutualisation bonus share or an interest in such a share
326‑120 Adjusted market value
326‑125 Undeducted membership costs
326‑130 Adjusted first day trading price of demutualisation shares
Subdivision 326‑E—CGT consequences of disposal of demutualisation shares or interests in such shares by a member of a mutual entity where the entity or a holding company of the entity becomes a company that is not a listed public company
326‑135 Application of Subdivision
326‑140 Disposal by pre‑CGT member of a demutualisation share (other than a demutualisation original share) or an interest in such a share where a member did not acquire membership rights by disposing of membership rights in another mutual entity
326‑145 Disposal by pre‑CGT member of a demutualisation share (other than a demutualisation original share) or an interest in such a share where member acquired membership rights by disposing of membership rights in another mutual entity
326‑150 Disposal by post‑CGT member of a demutualisation share (other than a demutualisation original share) or an interest in such a share
326‑155 Disposal by pre‑CGT member of a demutualisation original share or a non‑demutualisation bonus share, or an interest in such a share, where member did not acquire membership rights by disposing of membership rights in another mutual entity
326‑160 Disposal by pre‑CGT member of a demutualisation original share or a non‑demutualisation bonus share, or an interest in such a share, where member acquired membership rights by disposing of membership rights in another mutual entity
326‑165 Disposal by post‑CGT member of a demutualisation original share or a non‑demutualisation bonus share, or an interest in such a share
326‑170 Various adjusted market values
326‑175 Undeducted membership costs
Subdivision 326‑F—Variation of amount taken to be paid for shares or an interest in shares by a member of a mutual entity who made a capital gain or capital loss from disposal of membership rights in another mutual entity
326‑180 Amount taken to be paid for acquisition of shares or interest by member to be increased by capital gain or reduced by capital loss
Subdivision 326‑G—CGT consequences of disposal of rights or interests resulting from extinguishment of membership rights
326‑185 Disposal of right to receive shares in demutualised entity
326‑190 Extinguishment of right to shares in demutualised entity by the issue of the shares
326‑195 Disposal of right to receive shares in holding company
326‑200 Disposal of interest in trust that holds shares in demutualised entity
Subdivision 326‑H—CGT consequences of transfer of ordinary shares
326‑205 Transfer of share or distribution of proceeds of sale of share not to have any CGT consequences
Subdivision 326‑I—CGT consequences of disposal of demutualisation shares or an interest in such shares by a trustee on behalf of a member
326‑210 Disposal by a trustee
Subdivision 326‑J—CGT consequences of change in rights attaching to special shares or replacement of special shares by ordinary shares
326‑215 Change of rights to, and replacement of, special shares
Subdivision 326‑K—CGT consequences of disposal of shares or an interest in shares acquired under a roll‑over provision
326‑220 Disposal of shares or interest in shares
Subdivision 326‑L—CGT consequences of payment to member of demutualised entity out of accumulated surplus of the entity
326‑225 Payment out of assets of demutualised entity that is not included in assessable income is taken not to be a dividend
Subdivision 326‑M—Indexation
326‑230 Indexing of amounts
326‑235 Indexation factor
326‑240 Index number
Subdivision 326‑N—Non‑CGT consequences of issue of demutualisation shares
326‑245 General taxation consequences of issue of demutualisation shares
Schedule 2
Section 79A
Part I
Zone A
1. All that portion of the mainland of Australia lying north of a line commencing at the westernmost point at which the 26th parallel of south latitude intersects the western coastline thence east to the 141st meridian of east longitude thence north to the south‑eastern boundary of the Shire of Boulia thence generally north‑easterly by the boundaries dividing the Shires of Winton Flinders Dalrymple and Herberton from the Shires of Boulia Cloncurry McKinlay Richmond Etheridge and Mareeba to the 145th meridian of east longitude thence north to the northern boundary of the Shire of Mareeba thence by that boundary and the boundary dividing the Shires of Douglas and Cook to the eastern coastline.
2. All the islands forming part of Australia lying adjacent to the coastline of the portion of Australia described in paragraph 1.
3. Macquarie Island.
4. Norfolk Island.
5. The Territory of Heard Island and McDonald Islands.
6. The Australian Antarctic Territory.
7. The Territory of Cocos (Keeling) Islands.
8. The Territory of Christmas Island.
9. Lord Howe Island.
Part II
Zone B
1. All that portion of the mainland of Australia lying south of the southern boundary of Zone A and north of a line commencing at the northeastern corner of the shire of Broadsound in the State of Queensland thence generally westerly and southerly by the boundaries dividing the Shires of Broadsound Belyando Jericho Bauhinia Booringa and Balonne from the Shires of Sarina Nebo Wangaratta Dalrymple Aramac Barcaldine Blackall Tambo Murweh and Paroo to the boundary dividing the States of Queensland and New South Wales thence east by that boundary to its junction with the Barwon River at the northeastern corner of the Western Division in the State of New South Wales thence generally southwesterly by part of the boundary dividing the Central and Western Divisions of the State of New South Wales to the northernmost corner of the County of Mouramba and by the boundaries dividing the Counties of Mouramba Mossgiel Waljeers Kilfera Taila Wentworth and Tara from the Counties of Robinson Booroondarra Woore Manara Perry and Windeyer to the boundary dividing the States of New South Wales and South Australia thence south by that boundary to the northeast corner of the County of Hamley in the State of South Australia thence by the north boundaries of the Counties of Hamley and Young part of the north boundary of the County of Burra part of the east boundary of the District Council District of Hallett the east and a north boundary of the District Council District of Peterborough east and north boundaries of the District Council District of Carrieton to the southeast corner of the District Council District of Hawker the eastern north and west boundaries of that District Council District a western boundary of the District Council District of Kanyaka to the north boundary of the County of Frome thence west by part of that boundary and its prolongation west to the west boundary of the County of Manchester thence by the boundaries dividing the Counties of Manchester York and Buxton from the County of Hore‑Ruthven part of the west boundary of the County of Buxton and part of the western boundary of the District Council District of Kimba to the easternmost corner of the District Council District of Le Hunte thence generally northwesterly by the east and north boundaries of the District Council Districts of Le Hunte and Streaky Bay and the east north and west boundaries of the District Council District of Murat Bay to the southern coastline thence by that coastline westerly to the southwestern corner of the Road District of Phillips River in the State of Western Australia thence generally northwesterly by the boundaries dividing the Road Districts of Gnowangerup Kent Lake Grace Kulin Kondinin Narembeen Merredin and Nungarin from the Road Districts of Phillips River Yilgarn and Westonia to the northeast corner of the Road District of Nungarin thence westerly and northwesterly by the boundaries dividing the Road Districts of Nungarin Kununoppin‑Trayning Wyalkatchem Dowerin and Wongan‑Ballidu from the Road Districts of Mukinbuding Mt Marshall Koorda and Dalwallinu to the No. 2 rabbit proof fence by that fence to the north boundary of the Road District of Perenjori and thence by the boundaries dividing the Road Districts of Perenjori Morawa Mingenew Irwin Greenough and Geraldton from the Road Districts of Yalgoo Mullewa and Upper Chapman to the western coastline.
2. All that portion of Tasmania lying south and west of a line commencing on the west coast at the southwest corner of the County of Wellington and thence generally easterly and southerly by the boundaries dividing the counties of Wellington Devon and Westmorland from the counties of Russell Lincoln and Cumberland to the point on the River Shannon where the hydro‑electric transmission line from Waddamana to Launceston crosses that river thence in a straight line in a general southwesterly direction to the trigonometrical station known as Fishers Sugar Loaf thence by a straight line in a general southwesterly direction to the point where the Lyell Highway crosses the Dee River thence by a straight line in a general southwesterly direction to the confluence of the Derwent and Florentine Rivers thence by a straight line in a general southerly direction passing through the trigonometrical station on South East Cape to the southern coastline.
3. All the islands forming part of Australia lying adjacent to the coastline of either of the portions of Australia described in paragraphs 1 and 2.
4. King Island, Tasmania.
5. All the islands in the group of islands known as the Furneaux Group, Tasmania.
Schedule 2D—Tax exempt entities that become taxable
Division 57—Tax exempt entities that become taxable
Table of Subdivisions
Guide to Division 57
57‑A Key concepts
57‑B Predecessors of the transition taxpayer
57‑C Time when income derived
57‑D Time when losses and outgoings incurred
57‑E Assets and liabilities
57‑F Superannuation deductions
57‑G Denial of certain deductions
57‑H Domestic losses
57‑J Capital allowances and certain other deductions
57‑K Balancing adjustments
57‑L Trading stock
57‑M Imputation
57‑N Division not applicable in respect of certain plant
Guide to Division 57
57‑1 What this Division is about
This Division is about the income tax treatment of a taxpayer whose income ceases to be wholly exempt. Broadly, income, outgoings, gains and losses are attributed to the periods before and after the loss of full exemption.
Subdivision 57‑A—Key concepts
57‑5 Entities to which this Division applies
If:
(a) at a particular time, all of the income of a taxpayer is wholly exempt from income tax; and
(b) immediately after that time, the taxpayer’s income becomes to any extent assessable income;
then:
(c) the taxpayer is a transition taxpayer; and
(d) the time when the taxpayer’s income becomes to that extent assessable is the transition time; and
(e) the year of income in which the transition time occurs is the transition year for the taxpayer.
Subdivision 57‑B—Predecessors of the transition taxpayer
57‑10 Activities of transition taxpayer’s predecessor attributed to transition taxpayer
(1) If:
(a) at the transition time, the transition taxpayer performs particular functions or carries on particular activities; and
(b) during any period before the transition taxpayer first began to perform the functions or carry on the activities, an exempt government entity performed those same functions or carried on those same activities; and
(c) at the end of the period, responsibility for performing the functions or carrying on the activities was transferred, either directly or through one or more other exempt government entities, to the transition taxpayer;
this Division applies as if, during that period, anything done by or to the exempt government entity in performing those functions or carrying on those activities had instead been done by or to the transition taxpayer.
Note: As a result of this provision, the transition taxpayer may for example be able to deduct after the transition time, under Division 40 of the Income Tax Assessment Act 1997 as modified by Subdivision 57‑J of this Schedule, a portion of allowable capital expenditure incurred before the transition time by an exempt government entity whose functions were transferred to the transition taxpayer.
(2) An exempt government entity is:
(a) the Commonwealth, a State or a Territory; or
(b) an STB, within the meaning of Division 1AB of Part III, that is exempt from tax under that Division.
Subdivision 57‑C—Time when income derived
57‑15 Time when income derived
(1) To the extent that income derived by the transition taxpayer before the transition time is in respect of:
(a) services rendered; or
(b) goods provided; or
(c) the doing of any other thing;
at or after the transition time, the income is treated for the purposes of this Act as having been derived at the time the services were rendered, the goods were provided or the thing was done, as the case requires.
(2) To the extent that income derived by the transition taxpayer at or after the transition time is in respect of:
(a) services rendered; or
(b) goods provided; or
(c) the doing of any other thing;
before the transition time, the income is treated for the purposes of this Act as having been derived before that time.
Subdivision 57‑D—Time when losses and outgoings incurred
57‑20 Time when losses and outgoings incurred
(1) To the extent that a loss or outgoing (within the meaning of section 51 of this Act or section 8‑1 of the Income Tax Assessment Act 1997, as appropriate) incurred by the transition taxpayer before the transition time is in respect of:
(a) services rendered; or
(b) goods provided; or
(c) the doing of any other thing;
at or after the transition time, the loss or outgoing is treated for the purposes of this Act as having been incurred at the time the services were rendered, the goods were provided or the thing was done, as the case requires.
(2) To the extent that a loss or outgoing (within the meaning of section 51 of this Act or section 8‑1 of the Income Tax Assessment Act 1997, as appropriate) incurred by the transition taxpayer at or after the transition time is in respect of:
(a) services rendered; or
(b) goods provided; or
(c) the doing of any other thing;
before the transition time, the loss or outgoing is treated for the purposes of this Act as having been incurred before that time.
Subdivision 57‑E—Assets and liabilities
57‑25 Deemed disposal and re‑acquisition of assets
(1) This section applies to:
(a) the disposal of an asset by the transition taxpayer after the transition time; and
(b) a CGT event that happens after the transition time in relation to an asset owned by the transition taxpayer;
where the transition taxpayer owned the asset at all times from the transition time until the disposal or the CGT event.
Deemed disposal and re‑purchase
(2) Subject to subsection (5), in determining for the purposes of this Act (other than the excluded provisions mentioned in subsection (4)) whether an amount is included in, or allowable as a deduction from, the assessable income of the transition taxpayer in respect of the disposal, the transition taxpayer is taken:
(a) to have sold, immediately before the transition time, each of its assets; and
(b) to have purchased each of its assets again at the transition time for consideration equal to the asset’s adjusted market value at the transition time.
(2A) For the purposes of Parts 3‑1 and 3‑3 of the Income Tax Assessment Act 1997 (about CGT), in determining whether the transition taxpayer makes a capital gain or capital loss from a CGT event that happens after the transition time in relation to an asset referred to in subsection (1), the cost base and reduced cost base of the asset (at the transition time) is its adjusted market value at that time.
(3) An asset’s adjusted market value at the transition time is the asset’s market value at that time:
(a) reduced by any amount of income received or receivable by the transition taxpayer in respect of the asset at or after the transition time that:
(i) because of subsection 57‑15(2); or
(ii) because all of the income of the transition taxpayer was wholly exempt from income tax before the transition time;
is not included in the transition taxpayer’s assessable income; and
(b) increased by any amount of income received or receivable by the transition taxpayer in respect of the asset before the transition time that:
(i) because of subsection 57‑15(1); or
(ii) because the transition taxpayer’s income ceased to be exempt from income tax at the transition time;
is included in the transition taxpayer’s assessable income.