Private ruling: Additional tier 1 capital raising
Date of advice: 23 February 2021
Published: April 2021

Ruling: Q1: Will each Instrument be characterised as a non-share equity interest in the Entity as defined in section 995-1 of the Income Tax Assessment Act 1997 ? | A1: Yes. | Q2: Will distributions paid by the Entity on the Instrument be frankable distributions within the meaning of section 202-40 of the Income Tax Assessment Act 1997 ? | A2: Yes. | Q3: Will section 204-15 of the Income Tax Assessment Act 1997 apply to the Transaction? | A3: No. | Q4: Will section 204-30 of the Income Tax Assessment Act 1997 apply to the Transaction? | A4: No. | Q5: Will section 177EA of the Income Tax Assessment Act 1936 apply to the Transaction? | A5: No. | Q6: 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 an exchange, redemption or resale? | A6: No. | Q7: Will the Instrument be subject to the commercial debt forgiveness provisions in Division 245 of the Income Tax Assessment Act 1997 ? | A7: No. | Q8: 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 the Instrument or the issue of ordinary shares on exchange, or on redemption? | A8: No. | Q9: Will the issue of the Instrument, or the issue of ordinary shares on exchange or redemption give rise to CGT event D1 pursuant to section 104-35 of the Income Tax Assessment Act 1997 ? | A9: No. | Q10: Will the Entity be required to recognise gains or losses under Division 230 of the Income Tax Assessment Act 1997 in relation to the Instrument? | A10: No. | Q11: 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 the Instrument or ordinary shares on exchange? | A11: 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 1997 section 6-5 | Income Tax Assessment Act 1997 Division 197 | Income Tax Assessment Act 1997 section 104-35 | 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 Division 197 | 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) | Income Tax Assessment Act 1936 subsection 45C(3) | Income Tax Assessment Act 1936 section 177EA