Reforms to the scrip for scrip roll‑over

This consultation process has now been completed.
Date
-
Consultation Type
Exposure Draft

Key Documents

On 14 December 2013, the Government announced it would proceed with amendments first announced in May 2012 to tighten the scrip for scrip roll-over rules. The intention is to make it harder for companies and trusts to avoid capital gains tax when they sell subsidiary companies other than as part of a genuine merger or restructure of their business.

The proposed amendments:

  • expand the significant and common stakeholder tests to include any entitlements that interest holders have to acquire additional rights;
  • provide that a capital gain arising on the settlement of a debt owed by an acquiring entity to its parent company as part of the scrip for scrip acquisition is no longer disregarded;
  • extend the application of the cost base allocation rules regardless of whether the interest is issued to the group’s parent company or to another member of the group;
  • introduce a new condition on the availability of scrip for scrip roll-over relief in downstream acquisitions; and
  • extend the application of the restructure provisions to trusts restructures.

Submissions

No submissions are currently available.