| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051203214481
Date of Advice: 28 March 2017
Ruling
Subject: Capital raising and non-share dividends
Question 1
Will each Instrument be treated as an equity interest (as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)) under section 974-70 of the ITAA 1997?
Answer
Yes.
Question 2
Will issuing the Instrument cause Entity B to cease to be a 'wholly-owned subsidiary' of Entity A under section 703-30 of the ITAA 1997?
Answer
No.
Question 3
Will the Instrument be issued at or through a permanent establishment of an ADI in a listed country for the purposes of paragraph 215-10(1)(c) of the ITAA 1997?
Answer
Yes.
Question 4
Will the funds from the issuance of the Instrument be raised and applied solely for one or more of the permitted purposes under paragraphs 215-10(2)(a) and (c) for the purposes of paragraph 215-10(1)(d) of the ITAA 1997?
Answer
Yes.
Question 5
Will the Distributions made on the Instrument be unfrankable non-share dividends for the purposes of section 215-10 of the ITAA 1997?
Answer
Yes.
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 an Instrument by Entity B (wholly-owned subsidiary of Entity A) via its foreign branch in order to raise capital.