INCOME TAX ASSESSMENT ACT 1997 - SECT 124.520 Change of incorporation without change of entity

INCOME TAX ASSESSMENT ACT 1997 - SECT 124.520

  (1)   This section applies if:

  (a)   you are a * member of a body incorporated under a law described in column 1 of an item of the table; and

  (b)   the body is converted into a company incorporated under a law described in column 2 of the item, without creating a new legal entity; and

  (c)   it is reasonable to conclude that there is no significant difference:

  (i)   between the ownership of the body, and of rights relating to the body held by entities that owned the body, just before the conversion and the ownership of the company just after the conversion; or

  (ii)   between the mix of ownership of the body, and of rights relating to the body held by entities that owned the body, just before the conversion and the mix of ownership of the company just after the conversion.

Note:   See section   124 - 20 if an entity uses a share or interest sale facility.

  (2)   You can choose to obtain a roll - over if:

  (a)   as a result of the conversion you are issued with * shares in the company and you receive nothing else; and

  (b)   either you are an Australian resident at the time of the conversion or, if you are a foreign resident at that time:

  (i)   each of your interest and your other rights (if any) relating to the body was * taxable Australian property just before that time; and

  (ii)   the shares are taxable Australian property when they are issued.

Note 1:   The roll - over consequences are set out in Subdivision   124 - A and section   124 - 530.

Note 2:   Section   103 - 25 tells you when you have to make the choice.

  (3)   If the company is incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 , subsection   (2) applies in relation to rights as a * member of the company in the same way as that subsection applies to * shares in a company.

Note:   This may allow you to choose to obtain a roll - over. The roll - over consequences are set out in Subdivision   124 - A and section   124 - 535.

Exception for demutualisation of certain bodies

  (4)   This section does not apply to demutualisation of a body if Division   326 in Schedule   2H to the Income Tax Assessment Act 1936 applies to the demutualisation.

Note:   That Division deals with demutualisation of entities other than insurance companies and health insurers.