Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 126.265

Interest sale facilities

  (1)   For the purposes of this Subdivision, an entity (the investor ) is treated as owning a * membership interest (the roll - over interest ) in the receiving trust at a time (the deeming time ), if:

  (a)   the investor owned a membership interest in the transferring trust; and

  (b)   a trust is created, or a transfer happens, (the transaction ) as mentioned in paragraph   126 - 225(1)(a) in relation to * CGT assets of the transferring trust; and

  (c)   because:

  (i)   a * foreign law impedes the ability of the receiving trust to issue or transfer the roll - over interest to the investor; or

  (ii)   it would be impractical or unreasonably onerous to determine whether a foreign law impedes the ability of the receiving trust to issue or transfer the roll - over interest to the investor;

    it is * arranged that the receiving trust will issue or transfer the roll - over interest to another entity (the facility ) under the transaction instead of to the investor; and

  (d)   in accordance with that arrangement and as a result of the transaction, the facility:

  (i)   becomes the owner of the roll - over interest; and

  (ii)   owns the roll - over interest at the deeming time; and

  (e)   under the arrangement, the investor is entitled to receive from the facility:

  (i)   an amount equivalent to the * capital proceeds of any * CGT event that happens in relation to the roll - over interest (less expenses); or

  (ii)   if a CGT event happens in relation to the roll - over interest together with CGT events happening in relation to other membership interests--an amount equivalent to the investor's proportion of the total capital proceeds of the CGT events (less expenses).

  (2)   The facility is treated as not owning the roll - over interest at the deeming time.