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Edited version of private advice
Authorisation Number: 1051591217985
Date of advice: 7 October 2019
Ruling
Subject: Capital raising
Question 1
Will each Instrument be treated as a non-share equity interest (as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)) in the Entity by virtue of the operation of Division 974 of the ITAA 1997?
Answer
Yes.
Question 2
Will the Distributions made by the Entity on Instrument be frankable non-share dividends within the meaning given by section 202-30 and section 202-40of the ITAA 1997?
Answer
Yes.
Question 3
Will section 204-15 of the ITAA 1997 apply to the Transaction?
Answer
No.
Question 4
Will section 204-30 of the ITAA 1997 apply to the Transaction?
Answer
No.
Question 5
Will section 177EA of the Income Tax Assessment Act 1936 (ITAA 1936)apply to the Transaction?
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
Is the Instrument subject to the commercial debt forgiveness provisions in Division 245 of the ITAA 1997?
Answer
No.
Question 8
Will the issue of the Instrument, the issue of Ordinary Shares on Exchange or the repayment of Face Value upon Early Redemption result in the Entity being subject to an assessable profit or gain under sections 6-5 or 6-10 of the ITAA 1997?
Answer
No.
Question 9
Will the Entity be required to recognise gains or losses under Division 230 of the ITAA 1997 in relation to the Instrument?
Answer
No.
Question 10
Will the share capital account of the Entity become tainted, within the meaning of Division 197 of the ITAA 1997,by an issue of the Instruments or Ordinary Shares on Exchange?
Answer
No.
Relevant facts and circumstances
The Entity applied for a private binding ruling in respect of the issue of the Instrument by the Entity for the purpose of raising Tier 1 capital.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 45B
Income Tax Assessment Act 1936 subsection 45C(3)
Income Tax Assessment Act 1936 section 177EA
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 6-10
Income Tax Assessment Act 1997 Division 197
Income Tax Assessment Act 1997 section 202-30
Income Tax Assessment Act 1997 section 202-40
Income Tax Assessment Act 1997 section 202-45
Income Tax Assessment Act 1997 section 204-15
Income Tax Assessment Act 1997 section 204-30
Income Tax Assessment Act 1997 section 207-145
Income Tax Assessment Act 1997 section 207-158
Income Tax Assessment Act 1997 Division 230
Income Tax Assessment Act 1997 Division 245
Income Tax Assessment Act 1997 Division 974
Income Tax Assessment Act 1997 subsection 995-1(1)