Corporate consolidation exemption
The corporate consolidation exemption applies to eligible consolidations and transactions that either occurred or resulted from agreements or arrangements entered into before 1 July 2019.
While the exemption is not available for consolidations and transactions resulting from agreements or arrangements entered into on or after 1 July 2019, concessional relief may be available.
Eligible consolidations and transactions
A corporate consolidation is the formation of a consolidated or consolidatable group by the interposition of a head company between a corporation that is a member of a corporate group and the shareholders or unitholders of that corporation.
A mandatory requirement of the corporate consolidation exemption is the provision of a copy of the choice to consolidate and confirmation of consolidation under section 703-50 of the Income Tax Assessment Act 1997 (Cth) (the ITAA). Therefore, unlike the new corporate consolidation concession, the exemption is not available if the choice to consolidate is made or arises under a section other than section 703-50 of the ITAA. The exemption also does not apply where a corporate group did not exist immediately before the consolidation or the consolidation has the effect of merging two or more corporate groups.
Where a consolidation involves the interposition of a new head company above a corporation that is a member of a corporate group and a landholder for the purposes of the Duties Act 2000 (the Act), the consolidation will result in the acquisition of a landholder which is a transaction that is eligible for relief under the exemption. In addition to this transaction, the exemption may also provide relief to other eligible transactions effected as part of the consolidation.
For the purposes of the exemption, the corporate members necessary to establish the corporate group must remain part of the group for three years after the consolidation. Special provisions also apply where the consolidation involves the interposition of a new head company above a private unit trust scheme. In those circumstances, the new head company is treated as a private unit trust scheme for a period of three years after the consolidation.
For more information on the corporate consolidation exemption, refer to sections 250DA-DG of the Act, as in force before 1 July 2019.
Apply for an exemption
You can apply for the corporate consolidation exemption:
- at any time before the eligible transaction occurs, or
- within three years after it has occurred.
To apply, you must complete and lodge a corporate consolidation exemption application form.
Where the corporate consolidation involves the acquisition of a landholder, you must also complete and lodge a section 83 landholder acquisition statement online.
Your application must include copies of these documents:
- Constitutions and ASIC extracts, or the foreign equivalent if the corporation is registered overseas, for all relevant companies in the corporate group.
- Trust deeds, with all amending deeds, and unit registers for all relevant unit trust schemes in the corporate group.
- A diagram of the structure of the corporate group before and after the relevant acquisition showing the ownership structure and percentage holding of each relevant entity within the corporate group.
- Evidence of the ownership of interests in the former and new head entities immediately before and after the interposition of the new head company.
- The choice made to the Commissioner of Taxation of the Commonwealth in respect of the group under section 703-50 of the ITAA.
- Any confirmation by the Commissioner of Taxation of the status of the group.