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Edited version of private advice
Authorisation Number: 1051805096218
Date of advice: 29 March 2021
Ruling
Subject: Capital raising
Question 1
Will each Note be treated as a non-share equity interest (as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)) under section 974-70 for the purposes of Division 974 of the ITAA 1997?
Answer
Yes.
Question 2
Will the Distributions made on the Notes be non-share dividends that are frankable distributions within the meaning of sections 202-30 and 202-40 of the ITAA 1997?
Answer
Yes.
Question 3
Will a franking debit arise as a result of the application of the linked distribution provisions in section 204-15 of the ITAA 1997?
Answer
No.
Question 4
Will the Commissioner make a determination under paragraph 204-30(3)(a) of the ITAA 1997 to give rise to a franking debit to Entity A in relation to distributions paid in respect of the Notes?
Answer
No.
Question 5
Will the Commissioner make a determination under paragraph 177EA(5)(a) of the Income Tax Assessment Act 1936 (ITAA 1936) to give rise to a franking debit for Entity A in relation to Distributions paid in respect of the Notes?
Answer
No.
Question 6
Will the Commissioner make a determination under subsection 45C(3) of the ITAA 1936 in relation to the transaction, including the payment of Distributions or an Exchange, Redemption or Resale?
Answer
No.
Question 7
Will the Notes be subject to the commercial debt forgiveness provisions in Division 245 of the ITAA 1997?
Answer
No.
Question 8
Will an assessable profit or gain arise for Entity A in respect of section 6-5 of the ITAA 1997 or section 104-35 of the ITAA 1997 in relation to the issue of the Notes, the issue of Entity A Ordinary Shares on Exchange, or Redemption?
Answer
No.
Question 9
Will Entity A be required to recognise gains and losses under Division 230 of the ITAA 1997 in relation to the Notes?
Answer
No.
Question 10
Will the share capital account of Entity A become tainted, within the meaning of Division 197 of the ITAA 1997 upon the issue of the Notes or by the issue of Entity A Ordinary Shares on Exchange or Redemption?
Answer
No.
Relevant facts and circumstances
The head entity of a tax consolidated group (Entity A) applied for a private binding ruling in respect of the issuance of Notes by Entity A for the purpose of raising capital.
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