Product Ruling
PR 2015/3A1 - Addendum
Income tax: deductibility of interest in relation to investment in units in the Macquarie Flexi 100 Trust issued on or before 30 June 2018 - Flexi Professional
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Please note that the PDF version is the authorised version of this ruling.View the consolidated version for this notice.
Addendum
This Addendum is a public ruling for the purposes of the Taxation Administration Act 1953. It amends Product Ruling PR 2015/3 to incorporate the Supplementary Information Memorandum dated 29 May 2017.
PR 2015/3 is amended as follows:
Omit the first sentence; substitute 'In this Product Ruling the scheme is an investment in the Macquarie Flexi 100 Trust (the Fund) using a limited recourse loan (Investment Loan) made by Macquarie Specialist Investments Lending Limited (the Loan Provider) and, if applicable, the grant of put options (the Put Options) over the investment by the Loan Provider.'.
Omit the second bullet point; substitute:
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- ' Macquarie Flexi Professional Information Memorandum dated 3 April 2015 and Supplementary Information Memorandum dated 29 May 2017 for the Macquarie Flexi 100 Trust prepared by Macquarie Financial Products Management Limited as responsible entity (Responsible Entity or RE).'
Omit the table; substitute:
| Reference Asset | Description |
|---|---|
| Asian Equity Basket | Weighted basket of stock market indices or index tracking funds, including some or all of the Hang Seng H-Share Index ETF, Tracker Fund of Hong Kong, MSCI Taiwan Index, KOSPI 200 Index and MSCI Singapore Index |
| Australian Equity | The S&P/ASX 200 Index |
| Australian Equity Focus Basket | A weighted basket comprising at least 2 ASX-listed shares with large market capitalisation |
| Australian Listed Securities | A basket comprising one or more securities listed on the ASX |
| Best-of Basket | The best performing of two baskets: the ASX Tilt Basket and the Bond Fund Tilt Basket |
| Bond Fund Tilt Basket | A fixed basket providing exposure to the PIMCO GIS Total Return Bond Fund (60%), S&P/ASX 200 Index (20%) and Winton Global Alpha Fund (20%) |
| Bond Fund Tilt (US) Basket | A fixed basket providing exposure to the PIMCO GIS Total Return Bond Fund (60%), S&P 500 Index (20%) and Winton Global Alpha Fund (20%) |
| Enhanced Australian Equity Focus Basket | A basket comprising a number of ASX-listed shares with large market capitalisation. The weight for each share within the basket will be determined at the Swap Valuation Date based on performance |
| European Equity Classes: EURO STOXX 50® Index | Provides a blue-chip representation of super sector leaders in the Eurozone. The index is a market capitalisation weighted index of 50 stocks from 12 Eurozone countries |
| Funds Basket | A fixed basket providing exposure to the PIMCO GIS Income Fund and Winton Global Alpha Fund |
| International Basket | A basket comprising the S&P 500 Index, the EURO STOXX 50 Index, the iShares Asia 50 ETF and the Winton Global Alpha Fund |
| International Listed Securities | A basket comprising one or more internationally-listed securities |
| International Low Volatility Basket | US and Eurozone-focused indices over equities with relatively low one year realised volatility, and a basket of indices and ETFs with exposure to equities in Hong Kong, Singapore, South Korea and Taiwan |
| US Equity | The S&P 500 Index |
| US Equity Focus Basket | A basket comprising at least 2 shares listed on US exchanges with large market capitalisation |
| US Low Volatility | The Barclays US Low Volatility Equity Index invests in US stocks with low volatility relative to other US stocks and aims to provide higher risk-adjusted returns than a broad equity index |
Omit the word 'Closing'; substitute 'Final Investment'.
Omit the subparagraph; substitute:
- (u)
- Investors can exercise the 'Walk Away' feature, if applicable, described in the Information Memorandum and the Loan and Put Option Agreement. This feature involves the ability of Investors to exercise the Put Options as described in paragraph 28 of this Ruling before the Maturity Date.
Omit the second bullet point; substitute:
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- The interest rate is fixed for the prepaid interest period (which will be twelve months or less). The indicative interest rate for the first interest period will be available on the relevant Term Sheet. The actual interest rates will be determined by the Loan Provider on or around one week prior to the relevant Issue Date and, if different to the indicative interest rate, published on the Fund website. Where the Walk Away feature does not apply, the actual interest rate will be less than the adjusted loan rate provided under subsection 247-20(5), and
Omit the paragraph; substitute:
28. The Loan and Put Option Agreement also sets out the terms of the grant of Put Options by the Loan Provider, if applicable. As consideration for this grant, an Investor promises to pay the Put Options Premium. If not exercised in accordance with this agreement, each Put Option automatically lapses on the relevant Put Option Exercise Date.
Omit the paragraph, substitute:
33. Where an Investor enters into an Investment Loan in order to acquire Units in the Fund, that Investor is wholly or partly protected against a fall in the market value of the acquired Units through the operation of Put Options, if applicable, that the Investor acquires under the Loan and Put Option Agreement.
Omit the first sentence, substitute 'Where an Investor takes out an Investment Loan, that Investor may be granted Put Options by the Loan Provider in consideration for the Investor's promise to pay the Put Option Premium pursuant to clause 1.4 of the Loan and Put Option Agreement in the Information Memorandum dated 3 April 2015.'.
Omit the paragraph, substitute:
60. Where the Walk Away feature applies, as the Loan and Put Option Agreement specifies more than one occasion on which the capital protection can be invoked, the income tax legislation applies as if there were a separate Put Option for each of those occasions, being each Put Option Exercise Date (subsection 247-25(1)).
This Addendum applies on and from 1 April 2015.
Commissioner of Taxation
14 June 2017
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You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
Not previously issued as a draft
References
ATO references:
NO 1-BFRQOZ4
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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).
