Private ruling: Additional tier 1 capital raising
Date of advice: 14 October 2020
Published: December 2020

Ruling: Q1: Will each of the Securities 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 (ITAA 1997)? | A1: Yes. | Q2: Will distributions payable on the Securities be frankable distributions under section 202-40 of the ITAA 1997? | A2: Yes. | Q3: Will section 204-15 of the ITAA 1997 apply to the issue of the Security? | A3: No. | Q4: Will section 204-30 of the ITAA 1997 apply to the issue of the Security? | A4: No. | Q5: Will section 177EA of the Income Tax Assessment Act 1936 (ITAA 1936) apply to the issue of the Security? | A5: No. | Q6: Will the Commissioner make a determination under subsection 45C(3) of the ITAA 1936 in relation to the issue of the Security, including in respect of the payment of distributions or on a conversion, redemption or transfer? | A6: No. | Q7: Will the Securities be subject to the commercial debt forgiveness provisions in Division 245 of the ITAA 1997? | A7: No. | Q8: Will a gain or profit be assessable under section 6-5 of the ITAA 1997 for the Entity in relation to the issue of the Security or the issue of ordinary shares on conversion, or on redemption? | A8: No. | Q9: Will the issue of the Security, or the issue of ordinary shares on conversion or redemption give rise to CGT event D1 pursuant to section 104-35 of the ITAA 1997? | A9: No. | Q10: Will the Entity be required to recognise gains and losses under Division 230 of the ITAA 1997 in respect of the Security? | A10: No. | Q11: Will the share capital account of the Entity become tainted, within the meaning of Division 197 of the ITAA 1997, upon the issue of the Security, the issue of ordinary shares on conversion or upon redemption? | A11: No.

Relevant facts and circumstances: The Entity applied for a private binding ruling in respect of the issue of the Security 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