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Edited version of private ruling
Authorisation Number: 1011618669123
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Ruling
Subject: Interposition of a Non-Operating Holding Company
Ruling
1. Must the interposed company choose that the consolidated group will continue in existence at and after the completion time, pursuant to subsection 124-380(5) of the Income Tax Assessment Act 1997 (ITAA 1997)?
Yes.
2. Will the consolidated group continue in existence with the interposed company as the new head company at and after the completion time, per section 703-70 of the ITAA 1997?
Yes.
3. Will certain shares be disregarded for the purposes of Subdivision 124-G of the ITAA 1997, pursuant to paragraph 124-382(3)(a) of the ITAA 1997, on the basis that they are shares in the original company which are covered by subsection 124-382(4) of the ITAA 1997?
Yes.
4. Will certain shares be disregarded for the purposes of Subdivision 124-G, pursuant to paragraph 124-382(3)(b) of the ITAA 1997, on the basis that they are shares in the interposed company which are covered by paragraph 124-382 (4)(d)?
Yes.
5. By virtue of subsection 703-37(2) of the ITAA 1997, does Part 3-90 of the ITAA 1997 operate as if the original company were a wholly-owned subsidiary of the interposed company?
Yes.
6. By virtue of subsection 124-382(2) of the ITAA 1997, will certain preference shares be disregarded for the purposes of Subdivision 124-G?
Yes.
Year(s) of income or period(s) to which this ruling applies:
Year ended 30 June 2011
The scheme that is the subject of the ruling:
The scheme the subject of this ruling has been ascertained from various transaction documents that were provided to the Commissioner and are incorporated into the relevant scheme by reference. The scheme involves an internal restructure of a consolidated group.
Relevant provisions:
Income Tax Assessment Act 1997 Section 124-360.
Income Tax Assessment Act 1997 Subsection 124-360(1).
Income Tax Assessment Act 1997 Subsection 124-360(2).
Income Tax Assessment Act 1997 Section 124-365.
Income Tax Assessment Act 1997 Subsection 124-365(1).
Income Tax Assessment Act 1997 Subsection 124-365(2).
Income Tax Assessment Act 1997 Subsection 124-365(3).
Income Tax Assessment Act 1997 Subsection 124-365(4).
Income Tax Assessment Act 1997 Section 124-380.
Income Tax Assessment Act 1997 Subsection 124-380(1).
Income Tax Assessment Act 1997 Subsection 124-380(2).
Income Tax Assessment Act 1997 Subsection 124-380(3).
Income Tax Assessment Act 1997 Subsection 124-380(5).
Income Tax Assessment Act 1997 Subsection 124-380(7).
Income Tax Assessment Act 1997 Section 124-382.
Income Tax Assessment Act 1997 Subsection 124-382(2).
Income Tax Assessment Act 1997 Subsection 124-382(3).
Income Tax Assessment Act 1997 Paragraph 124-382(3)(a).
Income Tax Assessment Act 1997 Paragraph 124-382(3)(b).
Income Tax Assessment Act 1997 Subsection 124-382(4).
Income Tax Assessment Act 1997 Paragraph 124-382(4)(a).
Income Tax Assessment Act 1997 Paragraph 124-382(4)(b).
Income Tax Assessment Act 1997 Paragraph 124-382(4)(c).
Income Tax Assessment Act 1997 Paragraph 124-382(4)(d).
Income Tax Assessment Act 1997 Paragraph 124-382(4)(e).
Income Tax Assessment Act 1997 Paragraph 124-382(4)(f).
Income Tax Assessment Act 1997 Subsection 703-5(2).
Income Tax Assessment Act 1997 Section 703-65.
Income Tax Assessment Act 1997 Section 703-70.
Income Tax Assessment Act 1997 Subsection 703-70(1).
Income Tax Assessment Act 1997 Section 703-75.
Income Tax Assessment Act 1997 Section 703-80.
Income Tax Assessment Act 1997 Subsection 995-1(1).
Part IVA of the Income Tax Assessment Act 1936 (ITAA 1936) is a general anti-avoidance rule that can apply in certain circumstances if you or another taxpayer obtains a tax benefit in connection with an arrangement and it can be concluded that the arrangement, or any part of it, was entered into or carried out by any person for the dominant purpose of enabling a tax benefit to be obtained. If Part IVA applies the tax benefit can be cancelled, for example, by disallowing a deduction that was otherwise allowable.
We have not fully considered the application of Part IVA of the ITAA 1936 to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part
If you want us to rule on whether Part IVA of the ITAA 1936 applies we will first need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply.