Income Tax Assessment Act 1997
The object of this section is to ensure that, following an *ADI restructure to which Part 4A of the Financial Sector (Transfer and Restructure) Act 1999 applies, a body corporate is not prevented from being a *subsidiary member of a *consolidated group or *consolidatable group just because the body (or another body corporate) has issued, or issues, certain preference *shares.
703-37(2)
This Part (except Division 719 ) operates as if a body corporate that meets the requirement of subsection (3) at a particular time were a *wholly-owned subsidiary of another body corporate (the holding body ) at the time.
703-37(3)
The body corporate (the preference-share issuing body ) must be one that would be a *wholly-owned subsidiary of the holding body at the time if the *shares in the preference share-issuing body that are to be disregarded under subsection (4) did not exist.
703-37(4)
Disregard a *share in the preference-share issuing body if:
(a) a restructure instrument under Part 4A of the Financial Sector (Transfer and Restructure) Act 1999 is in force in relation to a non-operating holding company within the meaning of that Act; and
(b) because of the restructure to which the instrument relates, an *ADI becomes a subsidiary (within the meaning of that Act) of the non-operating holding company; and
(c) the preference share-issuing body is:
(i) the ADI; or
(ii) part of an extended licensed entity (within the meaning of the *prudential standards) that includes the ADI; and
(d) the shares are covered by subsection (5).
703-37(5)
A *share is covered by this subsection if:
(a) the share is a preference share; and
(b) any *return on the share is fixed at the time of issue by reference to the amount subscribed; and
(c) the share is not a *voting share; and
(d) either:
(i) the share is Tier 1 capital (within the meaning of the *prudential standards); or
(ii) the share would be Tier 1 capital (within the meaning of the prudential standards) were it not for a limit, imposed by those standards, on the proportion of Tier 1 capital that can be made up of such shares.
703-37(6)
Paragraph (5)(a) covers a preference share if it is issued:
(a) by itself; or
(b) in combination with one or more *schemes that are *related schemes in relation to a scheme under which a preference share is issued.
703-37(7)
If subsection (5) has covered a *share, but would (apart from this subsection) stop covering the share from a particular time, then for a period of 180 days after that time the subsection is taken to continue to cover the share.
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