| Transaction type | What it involves | When to apply |
|---|---|---|
| Relevant reconstruction transaction | Certain transactions between members of a family, including transfers of land, business assets or vehicle licences. | Apply for an exemption within 12 months after the relevant transaction, or for a ruling on a proposed transaction. |
| Relevant consolidation transaction | The formation of a new family by inserting a new head entity between an entity and the shareholders or unit holders of that entity. | Apply for an exemption within 12 months after the relevant transaction, or for a ruling on a proposed transaction. |
For the purposes of this exemption, a family consists of a parent entity and its subsidiary entities. To be a subsidiary entity, the parent entity must hold 90% of the securities of that entity and control 90% of the votes at a general meeting of that entity.
- See the entity restructuring fact sheet for details of the exemption available for some transactions that occur when a business is restructured.
- See Revenue Ruling 'DA 19 'Connected Entities Exemptions' for the meaning of certain terms relevant to applying for an entity restructuring exemption.
- See Commissioner's Practice DA 49 'Connected Entities Exemption - Interest in a Hybrid Company' for an explanation of when interest in a hybrid company is analogous to an issued share of a corporation for the purposes of a connected entity exemption.
Notify us of certain events that occur after a connected entities exemption is granted, or request a ruling whether a future event will result in a connected entities exemption being revoked.
An exemption can be revoked automatically if the parent entity ceases to own and control more than 50% of the transferee within three years after the transaction (unless this is as a result of a public float or demerger). The Commissioner can also revoke the exemption if it was part of a scheme to avoid duty or other state taxes.
Request a ruling to find out whether:
- a connected entities exemption would be granted for a proposed transaction or
- the Commissioner will revoke an exemption that was previously granted because of a new transaction involving the same entities.
