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
326‑70 Application of Subdivision
(1) This Subdivision applies where a member (the disposer) of a mutual entity which, or a holding company of which, becomes a listed public company disposes of an asset consisting of:
(a) a demutualisation share in the listed public company or an interest in such a share; or
(b) other shares (non‑demutualisation bonus shares) in the same company, or an interest in such shares, where the shares are bonus equities mentioned in Subdivision 130‑A of the Income Tax Assessment Act 1997 and any of the demutualisation shares (whether or not disposed of at the time) are the original equities mentioned in that Subdivision.
(2) For the purposes of this Subdivision, if any of the original equities mentioned in Subdivision 130‑A of the Income Tax Assessment Act 1997 is a demutualisation share, it is called a demutualisation original share.
326‑75 Capital losses made from certain disposals to be disregarded
A capital loss that the disposer makes from a disposal to which section 326‑80 or 326‑100 applies is to be disregarded.
326‑80 Disposal by pre‑CGT member of a demutualisation share (other than a demutualisation original 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
(1) If:
(a) the disposal is a disposal of a demutualisation share (other than a demutualisation original share) or an interest in such a share; and
(b) the disposer did not acquire membership rights in the demutualising entity by disposing of membership rights in another mutual entity; and
(c) the disposer is a pre‑CGT member; and
(d) the disposal occurs before the demutualisation listing day;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the disposer is taken to have done the following:
(e) to have paid for the acquisition of the share or interest the amount worked out by using the formula:
Start formula Adjusted market value times start fraction Share or interest disposed of over Total number of shares end fraction end formula
(f) to have paid that amount on the demutualisation resolution day;
(g) to have acquired the share or interest on the demutualisation resolution day.
(2) In the formula in paragraph (1)(e):
total number of shares means the total number of demutualisation shares issued.
326‑85 Disposal by pre‑CGT member of a demutualisation share (other than a demutualisation original 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
(1) If:
(a) the disposal is a disposal of a demutualisation share (other than a demutualisation original share) or an interest in such a share; and
(b) the disposer did not acquire membership rights in the demutualising entity by disposing of membership rights in another mutual entity; and
(c) the disposer is a pre‑CGT member; and
(d) the disposal occurs on or after the demutualisation listing day;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the disposer is taken to have done the following:
(e) to have paid for the acquisition of the share or interest the lesser of the following amounts:
(i) the amount worked out by using the formula:
Start formula Adjusted market value times start fraction Share or interest disposed of over Total number of shares end fraction end formula
(ii) the amount worked out by using the formula:
Start formula Adjusted first day trading price of the demutualisation shares times Share or interest disposed of end formula
(f) to have paid the amount referred to in paragraph (e) on the demutualisation resolution day;
(g) to have acquired the share or interest on the demutualisation resolution day.
(2) In the formula in subparagraph (1)(e)(i):
total number of shares means the total number of demutualisation shares issued.
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
(1) If:
(a) the disposal is a disposal of a demutualisation share (other than a demutualisation original share) or an interest in such a share; and
(b) the disposer acquired membership rights in the demutualising entity by disposing of membership rights in another mutual entity; and
(c) the disposer is a pre‑CGT member;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the disposer is taken to have done the following:
(d) to have paid for the acquisition of the share or interest both of the following amounts:
(i) the amount worked out by using the formula:
Start formula open bracket Undeducted membership costs plus start fraction Adjusted market value over Number of members end fraction close bracket times start fraction Share or interest disposed of over Number of disposer's shares end fraction end formula
(ii) any amount actually paid for the acquisition;
(e) to have paid the amount referred to in subparagraph (d)(i) on the demutualisation resolution day;
(f) to have paid any amount referred to in subparagraph (d)(ii) when it was actually paid;
(g) to have acquired the share or interest on the demutualisation resolution day.
(2) In the formula in subparagraph (1)(d)(i):
number of disposer’s shares means the number of demutualisation shares issued to the disposer or in which the disposer had an interest.
number of members means the total number of members of the other mutual entity at the time of the disposal of the membership rights in that 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
(1) If:
(a) the disposal is a disposal of a demutualisation share (other than a demutualisation original share) or an interest in such a share; and
(b) the disposer is a post‑CGT member;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the disposer is taken to have done the following:
(c) to have paid for the acquisition of the share or interest both of the following amounts:
(i) the amount worked out by using the formula:
Start formula Undeducted membership costs times start fraction Share or interest disposed of over Number of disposer's shares end fraction end formula
(ii) any amount actually paid for the acquisition;
(d) to have paid the amount referred to in subparagraph (c)(i) on the demutualisation resolution day;
(e) to have paid any amount referred to in subparagraph (c)(ii) when it was actually paid;
(f) to have acquired the share or interest on the demutualisation resolution day.
(2) In the formula in subparagraph (1)(c)(i):
number of disposer’s shares means the number of demutualisation shares issued to the disposer or in which the disposer had an interest.
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
(1) If:
(a) the disposal is a disposal of either:
(i) a demutualisation original share or an interest in such a share; or
(ii) a non‑demutualisation bonus share or an interest in such a share; and
(b) the disposer did not acquire membership rights in the demutualising entity by disposing of membership rights in another mutual entity; and
(c) the disposer is a pre‑CGT member; and
(d) the disposal occurs before the demutualisation listing day;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the following paragraphs have effect:
(e) for the purpose of applying Subdivision 130‑A of the Income Tax Assessment Act 1997, the amount paid for the acquisition of all the demutualisation original shares that is to be taken into account under that Division or Subdivision, as the case may be, is taken to be the amount worked out by using the formula:
Start formula Adjusted market value times start fraction Number of disposer's shares over Total number of shares end fraction end formula
(f) if the disposal is a disposal of a demutualisation original share or an interest in such a share, the disposer is taken:
(i) to have paid the amount referred to in paragraph (e) on the demutualisation resolution day; and
(ii) to have acquired the share or interest on the demutualisation resolution day.
(2) In the formula in paragraph (1)(e):
number of disposer’s shares means the number of demutualisation original shares issued to the disposer or in which the disposer had an interest.
total number of shares means the total number of demutualisation shares issued.
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
(1) If:
(a) the disposal is a disposal of either:
(i) a demutualisation original share or an interest in such a share; or
(ii) a non‑demutualisation bonus share or an interest in such a share; and
(b) the disposer did not acquire membership rights in the demutualising entity by disposing of membership rights in another mutual entity; and
(c) the disposer is a pre‑CGT member; and
(d) the disposal occurs on or after the demutualisation listing day;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the following paragraphs have effect:
(e) for the purpose of applying Subdivision 130‑A of the Income Tax Assessment Act 1997, the amount paid for the acquisition of all the demutualisation original shares that is to be taken into account under that Division or Subdivision, as the case may be, is taken to be the lesser of the following amounts:
(i) the amount worked out by using the formula:
Start formula Adjusted market value times start fraction Number of disposer's shares over Total number of shares end fraction end formula
(ii) the amount worked out by using the formula:
Start formula Adjusted first day trading price of the demutualisation shares times Number of disposer's shares end formula
(f) if the disposal is a disposal of a demutualisation original share or an interest in such a share, the disposer is taken:
(i) to have paid the amount referred to in paragraph (e) on the demutualisation resolution day; and
(ii) to have acquired the share or interest on the demutualisation resolution day.
(2) In the formulas in subparagraphs 1(e)(i) and (ii):
number of disposer’s shares means the number of demutualisation original shares issued to the disposer or in which the disposer had an interest.
total number of shares means the total number of demutualisation shares issued.
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
(1) If:
(a) the disposal is a disposal of either:
(i) a demutualisation original share or an interest in such a share; or
(ii) a non‑demutualisation bonus share or an interest in such a share; and
(b) the disposer acquired membership rights in the demutualising entity by disposing of membership rights in another mutual entity; and
(c) the disposer is a pre‑CGT member;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the following paragraphs have effect:
(d) for the purpose of applying Subdivision 130‑A of the Income Tax Assessment Act 1997, the amount paid for the acquisition of all the demutualisation original shares that is to be taken into account under that Division or Subdivision, as the case may be, is taken to be the sum of the following amounts:
(i) the amount worked out by using the formula:
Start formula Undeducted membership costs plus start fraction Adjusted market value over Number of members end fraction end formula
(ii) any amount actually paid for the acquisition;
(e) if the disposal is a disposal of a demutualisation original share or an interest in such a share, the disposer is taken:
(i) to have paid the amount referred to in subparagraph (d)(i) on the demutualisation resolution day; and
(ii) to have paid any amount referred to in subparagraph (d)(ii) when it was actually paid; and
(iii) to have acquired the share or interest on the demutualisation resolution day.
(2) In the formula in subparagraph (1)(d)(i):
number of members means the total number of members of the other entity at the time of the disposal of the membership rights in that 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
If:
(a) the disposal is a disposal of either:
(i) a demutualisation original share or an interest in such a share; or
(ii) a non‑demutualisation bonus share or an interest in such a share; and
(b) the disposer is a post‑CGT member;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the following paragraphs have effect:
(c) for the purpose of applying Subdivision 130‑A of the Income Tax Assessment Act 1997, the amount paid for the acquisition of all the demutualisation original shares that is to be taken into account under that Division or Subdivision, as the case may be, is taken to be the sum of:
(i) an amount equal to the undeducted membership costs; and
(ii) any amount actually paid for the acquisition;
(d) if the disposal is a disposal of a demutualisation original share or an interest in such a share, the disposer is taken:
(i) to have paid the amount referred to in subparagraph (c)(i) on the demutualisation resolution day; and
(ii) to have paid any amount referred to in subparagraph (c)(ii) when it was actually paid; and
(iii) to have acquired the share or interest on the demutualisation resolution day.
326‑120 Adjusted market value
Where membership rights not acquired by disposal of rights in another entity
(1) For the purposes of this Subdivision, the adjusted market value, when the expression is used in relation to a disposer who did not acquire membership rights in the demutualising entity by disposing of membership rights in another mutual entity, is the market value, as determined by a qualified valuer, of the demutualising entity on the demutualisation resolution day. However, in making the determination the valuer is to disregard the franking surplus of that entity on that day.
Where membership rights acquired by disposal of rights in another entity
(2) For the purposes of this Subdivision but subject to subsection (3), the adjusted market value, when the expression is used in relation to a disposer who acquired membership rights in the demutualising entity by disposing of membership rights in another mutual entity, is the market value, as determined by a qualified valuer, of the other entity at the time immediately before the disposer disposed of membership rights in the other entity. However, in making the determination the valuer is to disregard the franking surplus of the other entity at that time.
Indexation of amount mentioned in subsection (2)
(3) If the indexation factor (see section 326‑235) of the amount worked out under subsection (2) is more than one, that amount is taken to be replaced by that amount as indexed under Subdivision 326‑M.
326‑125 Undeducted membership costs
(1) For the purposes of this Subdivision, the undeducted membership costs, when the expression is used in relation to a disposer who did not acquire membership rights in the demutualising entity by the disposal of membership rights in another mutual entity, are the sum of the undeducted amounts of the costs that were incurred by the disposer in acquiring and maintaining membership in the demutualising entity less any distributions that:
(a) were made by the demutualising entity to the disposer before any shares in the demutualised entity were issued; and
(b) were not included in the disposer’s assessable income of any year of income.
(2) For the purposes of this Subdivision, the undeducted membership costs, when the expression is used in relation to a disposer who acquired membership rights in the demutualising entity by the disposal of membership rights in another mutual entity, are:
(a) if the disposer was a pre‑CGT member—the sum of the undeducted amounts of the costs that were incurred by the disposer in maintaining membership in the demutualising entity less any distributions that:
(i) were made by the demutualising entity to the disposer before any shares in the demutualised entity were issued; and