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  • Share issues / IPOs

    The withholding obligation doesn't apply if the purchaser acquires shares as a result of being issued or allotted those shares through an Initial Public Offer (IPO) because the shares will not be indirect Australian real property interests.

    An indirect Australian real property interest is a membership interest (for example, a share) held by one entity in another entity if certain additional conditions are met.

    At the time the share issue transaction is entered into, the shares are not membership interests that the issuing company holds in another entity (they are membership interests in the issuing company itself), and therefore cannot be indirect Australian real property interests.

    An option to acquire shares

    The acquisition of an option to be issued new shares in a company would not be an option that is subject to the withholding on the basis that any shares that could be acquired via the exercise of the option would not be an indirect Australian real property interest. 

      Last modified: 01 Mar 2021QC 48972