Taxation (savings investment and miscellaneous provisions) Act 2006 and Taxation (annual rates of income tax 2006-07) Act 2006: Reverse takeovers

Reverse takeovers

Section OD 5AA of the Income Tax Act 1994 and the Income Tax Act 2004

Concessionary continuity rules, which apply to carrying forward losses and imputation credits when there is a change in a company's shareholding, were extended to recognise that continuity can be maintained through reverse takeovers or mergers by the introduction of section OD 5AA by the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006. That section has been amended because it did not produce the correct result where:

• treasury stock or cross-shareholdings are cancelled without consideration upon the takeover; or
• the subsidiary of the initial parent is also a limited attribution company.

Paragraphs (e) and (f) of section OD 5AA(2) have been amended to correct the position, effective from the original application date of the 1998-99 income year.

Other sections in this legislation

| Offshore investment | Tax rules for PIEs | Tax on geothermal wells | Australian superannuation fund exemption | New rules for selecting SSCWT rates | Allowing documents to be removed for inspection | Military and police allowances | New rules for spreading income on the sale of patents | Organisations approved for charitable donee status | Consolidated groups and foreign losses | Assessments by the Commissioner | GST and financial services | GST on fringe benefits | GST grouping rules | Taxation of business environmental expenditure | Family assistance provisions | Rewrite amendments | Tax depreciation treatment of patents | Fringe benefit tax | Depreciation formula | Economic rate of depreciation | Calculating depreciation rates | Election to depreciate | Transitional residents | Death and asset transfers | New GST due date | Limit on refunds and allocations of tax | The imputation system and companies | Reverse takeovers | Changes in GST taxable periods | Miscellaneous technical amendments | 

Date published: 08 Nov 2006

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