Disclaimer
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 private advice

Authorisation Number: 1052040610555

Date of advice: 5 October 2022

Ruling

Subject: Tier 1 capital raising

Question 1

Will each Security be characterised as a non-share equity interest in the Entity as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997?

Answer

Yes

Question 2

Will Distributions paid by the Entity on the Securities be frankable distributions under section 202-40 of the Income Tax Assessment Act 1997?

Answer

Yes

Question 3

Will section 204-15 of the Income Tax Assessment Act 1997 apply to the Transaction?

Answer

No

Question 4

Will section 204-30 of the Income Tax Assessment Act 1997 apply to the Transaction?

Answer

No

Question 5

Will section 177EA of the Income Tax Assessment Act 1936 apply to the Transaction?

Answer

No

Question 6

Will the Commissioner make a determination under subsection 45C(3) of the Income Tax Assessment Act 1936 in relation to the Transaction, including the payment of Distributions or a Conversion, Redemption or Resale?

Answer

No

Question 7

Will the Securities be subject to the commercial debt forgiveness provisions in Division 245 of the Income Tax Assessment Act 1997?

Answer

No

Question 8

Will a gain or profit be assessable under section 6-5 of the Income Tax Assessment Act 1997 for the Entity in relation to the issue of Securities or the issue of Ordinary Shares on Conversion, or on Redemption?

Answer

No

Question 9

Will the issue of Securities or the issue of Ordinary Shares on Conversion or Redemption give rise to CGT event D1 pursuant to section 104-35 of the Income Tax Assessment Act 1997?

Answer

No

Question 10

Will the Entity be required to recognise gains and losses under Division 230 of the Income Tax Assessment Act 1997 in relation to the Securities?

Answer

No

Question 11

Will the share capital account of the Entity become tainted, within the meaning of Division 197 of the Income Tax Assessment Act 1997, by an issue of Securities or Ordinary Shares on Conversion, or on Redemption?

Answer

No

Relevant facts and circumstances

The Entity applied for a private ruling in respect of the issue of the Securities by the Entity for the purpose of raising Tier 1 Capital.

Relevant legislative provisions

Income Tax Assessment Act 1936 section 45

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 section202-40

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 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)