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.
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).
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
(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.
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.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.