Income tax 2019

Assessing market value ratios for roll-over relief provision

Source: Taxation In Australia Journal Article

Published Date: 1 Nov 2019


The application of the CGT roll-over relief under s 615-20(2) of the Income Tax Assessment Act 1997 (Cth) depends on the comparison of two market value ratios. The first market value ratio involves exchanging shareholders' shares in the interposed entity, and the second market value ratio involves exchanging shareholder's shares in the original entity. Assessing whether the two ratios are equal is complicated if the original entity has different classes of shares with different rights. The outcome of the comparison is very fact-specific, depending on whether or not a market value discount should be applied to shares subject to certain shareholder right restrictions, which in turn depends on, inter alia, the certainty of the proposed exchange of shares to proceed and the time frame for the completion of the proposed exchange of shares.

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  • Published By: Hung Chu
  • Published On:1 Nov 2019

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Income tax 2019

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