08 May 07 Consolidation and ADIsThe Government will remove taxation impediments to the restructuring of conglomerates containing authorised deposit taking institutions (ADIs) involving the appointment of a non operating holding company as the head company of the consolidated group, with effect from 1 July 2007.
Currently, if a consolidated group headed by an ADI were to restructure and appoint a non operating holding company as the head company of the group, the ADI would become a subsidiary company and would not be able to issue preference shares outside the group.
The measure will ensure that ADIs, as subsidiary members of a group, can continue to issue certain preference shares to non group members and maintain their tax position. The measure will also ensure that ordinary shareholders who dispose of their shares in an ADI, in exchange for shares in the non operating holding company, can obtain a capital gains tax roll over.
See Budget Paper No 2, p 12