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INCOME TAX ASSESSMENT ACT 1936 - SECT 121AK Demutualisation method 6

INCOME TAX ASSESSMENT ACT 1936 - SECT 121AK

Demutualisation method 6

  (1)   Under demutualisation method 6 , in connection with the implementation of the demutualisation of a life insurance company:

  (a)   all membership rights in the company are extinguished; and

  (b)   the whole of the life insurance business of the company is, under a scheme confirmed by the Federal Court of Australia, transferred to another company formed for the purpose; and

  (c)   shares (the ordinary shares ) of only one class in the other company are:

  (i)   issued, at the election of each person in the policyholder/member group, to the person or to a trustee to sell on behalf of the person; or

  (ii)   issued to a trustee, at the election of each person in the policyholder/member group, to distribute to the person or to sell on behalf of the person; and

  (d)   the trustee sells the ordinary shares and distributes the proceeds of sale to the person or distributes the ordinary shares to the person; and

  (e)   the ordinary shares are listed within the listing period.

Note:   Other things may also happen in connection with the implementation of the demutualisation.

  (2)   The following diagram shows the main events, where this demutualisation method is used.

A diagram of Demutualisation method 6, showing the main events of the demutualisation of a life insurance company

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