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If a company subdivides ('splits') or consolidates its share capital in accordance with section 193 of the Corporations Law and all of the following circumstances apply: (a) the original shares are not cancelled or redeemed in terms of the Corporations Law; (b) there is no change in the total amount of authorised capital, issued capital and paid-up capital of the company; and (c) the proportion of equity owned by each shareholder is maintained; the shareholder does not dispose of his or her shares for capital gains purposes. As there is no disposal of the shares, the issue of rollover relief under section 160ZZP of the Income Tax Assessment Act 1936 does not arise.

The subdivided or consolidated shares have the same date of acquisition as the original shares to which they relate. For example, if the original shares were acquired pre-CGT, the subdivided or consolidated shares also have a pre-CGT status.

In the case of original shares acquired post-CGT, subsections 160ZH(12) and (13) apply to attribute a proportionate cost base to the subdivided or consolidated shares.

The cancellation of original share certificates and their replacement with new certificates as part of the subdivision or consolidation process will not change the result above, unless there is also a cancellation or redemption of the shares themselves in terms of the Corporations Law. If the original shares are in fact cancelled or redeemed under the Corporations Law, there is a disposal of these shares in accordance with paragraph 160M(3)(c). In this case, roll-over relief is available under section 160ZZP if the other requirements of the section are satisfied (see TR 94/D5).