Income Tax (Transitional Provisions) Act 1997

This Subdivision provides for a deferral of the taxation consequences that would occur because of an event (the deferral event) happening involving an entity (the originating entity) and another entity (the recipient entity) if:

the event occurs in connection with a life insurance company (the member life insurance company) becoming a member of a consolidated group; and

the relevant conditions in section 713‑520 are met.

If the originating entity is a company, the deferral event referred to in subsection (1) is a CGT event referred to in subsection (4) happening to a CGT asset (the original asset) where, apart from this Subdivision, the happening of the event would have resulted in:

an amount (other than a capital gain) being included in the originating entity’s assessable income; or

the originating entity making a capital gain.

If the originating entity is a trust, the deferral event referred to in subsection (1) is a CGT event referred to in subsection (4) happening to a CGT asset (also the original asset) where, apart from this Subdivision, the happening of the event would have resulted in:

an amount (other than a capital gain) being included in the net income of the trust; or

the trustee making a capital gain.

The CGT events are:

CGT events A1, B1, D1, D2, D3, E2, F1 and F2; and

CGT event C2, but only if the CGT asset that ends is a unit in a unit trust that is replaced by an equivalent membership interest (the replacement interest) in a company or in another trust.