Draft Taxation Determination

TD 1999/D12

Income tax: interest withholding tax exemption under section 128F of the Income Tax Assessment Act 1936 - does an issue of a debenture fail the public offer test under subsection 128F(5) if an associate of the company that issued the debenture takes a security interest over the debenture?

Please note that the PDF version is the authorised version of this draft ruling.

This document has been finalised by TD 1999/19.

FOI status:

draft only - for comment

Preamble

Draft Taxation Determinations (DTDs) present the preliminary, though considered, views of the Australian Taxation Office. DTDs should not be relied on; only final Taxation Determinations represent authoritative statements by the Australian Taxation Office.

1. No, unless the security interest is held by way of mortgage or similar security and at the time of issue the issuing company knew or had reasonable grounds to suspect an interest in the debenture was being, or would later be, acquired by an associate.

2. Whether reasonable grounds exist is, of course, a question of fact to be determined in the light of the individual facts and circumstances of each case. Although reasonable care must be taken, a detailed examination into this matter would not be expected at or before the date of issue.

Your comments

3. If you wish to comment on this draft Determination, please send your comments promptly by Friday 26 February 1999 to:

Contact officer details have been removed following publication of the final ruling.

Commissioner of Taxation
27 January 1999

References

ATO references:
NO 97/6464-0; 99/658-1

ISSN 1038 - 8982

Legislative References:
ITAA 128F
ITAA 128F(5)

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).