(ii) were not included in the disposer’s assessable income of any year of income; or
(b) if the disposer is a post‑CGT member, the sum of:
(i) the undeducted amounts of the costs that were incurred by the disposer in acquiring and maintaining membership in the other entity; and
(ii) the undeducted amounts of the costs that were incurred by the disposer in maintaining membership in the demutualising entity;
less any distributions that:
(iii) were made by the demutualising entity or the other entity to the disposer before any shares in the demutualised entity were issued; and
(iv) were not included in the disposer’s assessable income of any year of income.
(3) If at any time 2 or more persons were joint members of a mutual entity, any costs incurred by any one or more of them in acquiring or maintaining the joint membership are taken to have been incurred by each of them.
(4) Subject to subsection (5), the undeducted amount of a cost is the amount of the cost to the extent to which a deduction has not been allowed, and is not allowable, in respect of it.
(5) If:
(a) an amount of a cost referred to in subsection (1) or (2) was incurred before the demutualisation resolution day; and
(b) the indexation factor (see section 326‑235) of the amount is more than one;
a reference in this section to the undeducted amount of that cost is a reference to the undeducted amount as indexed under Subdivision 326‑M.
326‑130 Adjusted first day trading price of demutualisation shares
(1) For the purposes of this Subdivision, the adjusted first day trading price of demutualisation shares is the amount worked out using the formula:
Start formula First day trading price of demutualisation shares minus start fraction Value of franking surplus over Total number of demutualisation shares issued end fraction end formula
(2) In this section:
first day trading price of demutualisation shares means the price per share, as published by ASX Limited, at which the demutualisation shares were last traded, on the stock market operated by ASX Limited, on the demutualisation listing day.
value of franking surplus means the value, as determined by a qualified valuer, of the franking surplus of the demutualised entity on the demutualisation listing day.
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
Table of sections
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
326‑135 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 company that is not a listed public company disposes of an asset consisting of:
(a) a demutualisation share in that company that is not a 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.
326‑140 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
(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 demutualisation 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 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
(e) to have paid that amount on the demutualisation resolution day;
(f) to have acquired the share or interest on the demutualisation resolution day.
(2) In the formula in paragraph (1)(d):
total number of shares means the total number of demutualisation shares issued.
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
(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.
326‑150 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.
326‑155 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
(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;
then, for the purpose of working out whether the disposer made a capital gain or capital loss from the disposal, the following paragraphs apply:
(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 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
(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 paragraph (d) 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)(d):
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.
326‑160 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
(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 both 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; and
(e) if the disposal is a disposal of a demutualisation original share or an interest in such a share, the disposer is taken to have done the following:
(i) to have paid the amount referred to in subparagraph (d)(i) on the demutualisation resolution day;
(ii) to have paid any amount referred to in subparagraph (d)(ii) when it was actually paid;
(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 mutual entity at the time of the disposal of the membership rights in that 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
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 both of the following amounts:
(i) an amount equal to the undeducted membership costs;
(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 to have done the following:
(i) to have paid the amount referred to in subparagraph (c)(i) on the demutualisation resolution day;
(ii) to have paid any amount referred to in subparagraph (c)(ii) when it was actually paid;
(iii) to have acquired the share or interest on the demutualisation resolution day.
326‑170 Various adjusted market values
Application
(1) This section has effect for the purposes of this Subdivision.
Where membership rights not acquired by disposal of rights in another entity
(2) 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 lesser of the issue day adjusted market value and the resolution day adjusted market value.
Where membership rights acquired by disposal of rights in another entity
(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 disposal day adjusted market value.
Issue day adjusted market value
(4) The issue day adjusted market value is the market value, as determined by a qualified valuer, of the demutualised entity on the day on which the demutualisation shares were issued. However, in making the determination the valuer is to disregard the franking surplus of the demutualised entity on that day.
Resolution day adjusted market value
(5) The resolution day adjusted market value 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 the demutualising entity on that day.
Disposal day adjusted market value
(6) Subject to subsection (7), the disposal day adjusted market value 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 (6)
(7) If the indexation factor (see section 326‑235) of the amount worked out under subsection (6) is more than one, that amount is taken to be replaced by that amount as indexed under Subdivision 326‑M.
326‑175 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 the sum of:
(a) if the disposer was a pre‑CGT member—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
(ii) were not included in the disposer’s assessable income of any year of income; or