Australia: “Top hatting” transaction did not qualify for basis step up (Federal Court decision)
The shares did not have an independent or separate value from the interests in the previously "stapled" entities.
Did not qualify for basis step up (Federal Court decision)
The Federal Court held in the context of a “top hatting” transaction that the Division 615 rollover rules applied such that shares distributed by the taxpayer did not qualify for a step up in basis under the Subdivision 124-M rollover rules, because although the shares were technically “unstapled” from the shares of two other entities prior to their acquisition and subsequent distribution, the shares did not have an independent or separate value from the interests in the previously stapled entities.
The case is: AusNet Services Limited v Commissioner of Taxation [2024] FCA 90 (16 February 2024)
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