1. Corporate reconstruction exemption: sections 250-250D
The corporate reconstruction exemption applies to eligible transactions occurring on or after 1 January 2004. An application for the exemption may be made at any time before the eligible transaction occurs or within 3 years after the eligible transaction occurs.
The Commissioner of State Revenue must grant the corporate reconstruction exemption on an instrument or transfer of dutiable property if the Commissioner is satisfied that:
(a) the instrument or transfer is, or arises out of, an eligible transaction; and
(b) the eligible transaction does not arise from arrangements or a scheme devised for the principal purpose of taking advantage of the benefit of the corporate reconstruction exemption; and
(c) the conditions of the exemption, if any, will be met by the applicant.
As foreshadowed in (c), the exemption may be granted subject to conditions, which are binding on each member of the corporate group.
2. Corporations, parent corporations and corporate groups: section 250
A corporation includes:
(a) a unit trust scheme;
(b) a public offer superannuation fund within the meaning of section 18 of the Superannuation Industry (Supervision) Act 1993 that has at least 300 public subscribers;
A parent corporation is a corporation that directly or indirectly:
(a) holds at least 90 percent of the beneficial ownership of another corporation ("the subsidiary"); and
(b) has the ability to cast, or to control the casting of, at least 90 percent of the maximum number of votes that may be cast at a general meeting of the subsidiary.
A corporate group is a parent corporation and the subsidiaries of that parent corporation. Further if stapled securities are quoted on the ASX or a recognised stock exchange, the corporations in which the shares or units are issued, and the subsidiaries of each of those corporations, constitute a corporate group. However, nothing in sections 250-250D applies to a corporation to the extent that it is a trustee of a discretionary trust. In addition, if Corporation A holds dutiable property on trust (other than as trustee of a unit trust scheme) for Corporation B, then Corporation A and Corporation B are taken not to be members of the same corporate group.
A relevant corporate group means the members of a corporate group that are parties to an eligible transaction and those members of the corporate group necessary to establish the connection between the parties as a parent corporation and subsidiary or as subsidiaries of the same parent corporation.
3. Eligible transactions: section 250A
An eligible transaction is any of the following that occurs on or after 1 January 2004:
(a) a transfer of dutiable property (as defined in section 10(1)) from one member of a corporate group to another member of the group; or
(b) a vesting of dutiable property by, or as a consequence of, a court order where the property was held by one member of a corporate group and vested in another member of the group; or
(c) an application to register a motor vehicle as a result of a transfer of the vehicle from one member of a corporate group to another member of the corporate group; or
(d) a dutiable transaction to which section 14 applies between members of a corporate group; or
(e) a relevant acquisition under Part 2 of Chapter 3 of the Act by a member of a corporate group from another member of the group; or
(f) a declaration of trust relating to dutiable property the specification of which forms part of the declaration of trust or part of the transaction constituted by the declaration of trust by one member of a corporate group under which the dutiable property is held on trust for another
member of the group; or
(g) any other transaction that results in the beneficial ownership of dutiable property (other than an excluded transaction) moving from one member of a corporate group to another member of the group.
4. Revocation of the corporate reconstruction exemption: section 250D
The Commissioner of State Revenue may revoke the corporate reconstruction exemption in certain circumstances described in section 250D.
Those circumstances include where members of the relevant corporate group do not remain members of the corporate group for at least three years from the date on which the eligible transaction occurred, but not where that cessation is by virtue of:
(a) a public float (as defined in section 250D(3)) that occurred within 12 months after the day on which the transaction occurred; or
(b) the shares or units of the member being unstapled to enable its liquidation, deregistration, dissolution or, in the case of a unit trust scheme, winding up; or
(c) its liquidation, deregistration or, in the case of a unit trust scheme, winding up.