Private ruling: Capital raising
Date of advice: 29 March 2021
Published: June 2021

Ruling: Q1: Will each Note be treated as a non-share equity interest (as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)) under section 974-70 for the purposes of Division 974 of the ITAA 1997? | A1: Yes. | Q2: Will the Distributions made on the Notes be non-share dividends that are frankable distributions within the meaning of sections 202-30 and 202-40 of the ITAA 1997? | A2: Yes. | Q3: Will a franking debit arise as a result of the application of the linked distribution provisions in section 204-15 of the ITAA 1997? | A3: No. | Q4: Will the Commissioner make a determination under paragraph 204-30(3)(a) of the ITAA 1997 to give rise to a franking debit to Entity A in relation to distributions paid in respect of the Notes? | A4: No. | Q5: Will the Commissioner make a determination under paragraph 177EA(5)(a) of the Income Tax Assessment Act 1936 (ITAA 1936) to give rise to a franking debit for Entity A in relation to Distributions paid in respect of the Notes? | A5: No. | Q6: 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? | A6: No. | Q7: Will the Notes be subject to the commercial debt forgiveness provisions in Division 245 of the ITAA 1997? | A7: No. | Q8: Will an assessable profit or gain arise for Entity A in respect of section 6-5 of the ITAA 1997 or section 104-35 of the ITAA 1997 in relation to the issue of the Notes, the issue of Entity A Ordinary Shares on Exchange, or Redemption? | A8: No. | Q9: Will Entity A be required to recognise gains and losses under Division 230 of the ITAA 1997 in relation to the Notes? | A9: No. | Q10: Will the share capital account of Entity A become tainted, within the meaning of Division 197 of the ITAA 1997 upon the issue of the Notes or by the issue of Entity A Ordinary Shares on Exchange or Redemption? | A10: No.

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 Notes by Entity A for the purpose of raising capital.