The statutory meaning is settled. The ATO’s attention has moved to Part IVA, and the guidance is coming.
Back-to-back CGT rollovers. The ATO has been circling since 2018. The “nothing else” battle is settled: the High Court refused special leave in August 2025. The pivot is now to Part IVA.
The background
Business restructures rarely fit one rollover. Getting from a trust to a corporate structure ready for sale often requires a sequence, say a Subdivision 122-A corporatisation followed by a Subdivision 124-M scrip-for-scrip. Each rollover may individually qualify. The question is whether they survive in series.
Several CGT rollovers require the taxpayer to receive shares and “nothing else”: Subdivision 124-E, Division 125, Division 615 among them. The ATO’s concern: under a single reorganisation plan, does the taxpayer at step one also receive something else, a right to consideration under the subsequent step? If so, the “nothing else” condition fails and rollover relief is denied at the first step.
The Full Federal Court in AusNet Services [2025] FCAFC 21 rejected that approach. “Nothing else” concerns only the quid pro quo, the consideration received in exchange for the shares disposed of. A subsequent planned rollover does not constitute something else at step one. The High Court declined to intervene. The statutory meaning is settled.
The Part IVA pivot
The ATO has flagged forthcoming guidance on Part IVA and multiple CGT rollovers. As of March 2026, this has not been released. But the direction is clear.
Section 177C(2)(a)(i) ITAA 1936 excludes from “tax benefit” benefits attributable to choices expressly provided for in the law, including rollover elections. But that exclusion does not apply where the scheme was entered into to create the circumstances enabling the choice to be made. Where rollover step one exists to manufacture access to rollover step two, Part IVA may engage.
ATO scrutiny intensifies where the sequence converts non-discountable assets to discountable shares, achieves a rate reduction, or generates cost base step-ups on consolidation. The more steps in the chain, the harder it becomes to sustain a commercial narrative for each one.
The practical question
It comes down to commercial substance. Restructures with genuine commercial drivers, operational efficiency, capital raising, governance, should resist Part IVA. The risk sharpens where the chain exists primarily to manufacture a tax outcome unavailable through a single step.
Hart v FCT [2019] FCAFC 179 remains the cautionary tale. Subdivision 122-A followed by two Subdivision 124-M exchanges, the 50% CGT discount denied under ss 115-25 and 115-30 ITAA 1997 because the Findex shares were acquired only three days before sale.
The Part IVA guidance is coming. Document the commercial rationale now.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.