Extinguishment of right to shares in demutualised entity by the issue of the shares
326-190 Extinguishment of right to shares in demutualised entity by the issue of the shares
If, under the direct method of demutualisation or the holding company method of demutualisation, shares in a demutualised entity are issued to an existing member, Parts 3‑1 and 3‑3 of the Income Tax Assessment Act 1997 do not apply in respect of any CGT event constituted by the extinguishment of the member’s right to have the shares issued to the member.
If, under the combined direct and holding company method of demutualisation, shares in a demutualised entity or in a holding company are issued to an existing member, Parts 3‑1 and 3‑3 of the Income Tax Assessment Act 1997 do not apply in respect of any CGT event constituted by the extinguishment of the member’s rights to have the shares issued to the member.
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