Another condition is that the assets/properties of the undertaking are transferred to the resulting company at values appearing in the books of demerged company immediately before the demerger. Because each stapled security is made up of one unit in SCA Property Management Trust and one unit in SCA Property Retail Trust, the sale proceeds are apportioned 99.4% to the SCA Property Retail Trust unit and 0.6% to the SCA Property Management Trust unit, giving separate sale proceeds of: The cost base of the units is apportioned the same way. The key tax implications of an indirect demerger are as follows: The distribution is exempt for income tax purposes in the hands of the shareholders. Blacks Law Dictionary (7, The term amalgamate according to Oxford Advanced Learners Dictionary (8th edition 2010), means to put two or more things together so that they form one. Suppose you purchased your original Woolworths shares for $30.00 each. $1.6248918 for each SCA Property Retail Trust unit, and. Here's what We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations. Even in this case, a plausible interpretation is that if entirety ofthe business is transferred to the resulting company, such that the demerged company is unable to continue the transferred business and continuity of business is preserved in the hands of the transferee companythere may be succession of business.The issue is however litigative and in absence of clarity on the issue it is important to review judicial developments on the subject when matter is being evaluated. CIT v. T Veerabhadra Rao, K Koteswara Rao & Co. (1985) 155 ITR 152 (SC). For further information on the Demerger refer to the Scheme Booklet ( PDF, 13MB) released by NAB dated 7 December 2015. The controversy as to whether Goodwill of a business is an intangible asset eligible for depreciation was settled by the Honble Supreme Court (SC) in the case of Smifs Securities Ltd.