Private ruling: Capital raising
Published: March 2016

Ruling: 1. Will the Note be treated as an equity interest (as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)) under section 974-70 of the ITAA 1997? | 2. Will the Distributions paid in respect of the Note be non-share dividends that are frankable within the meaning of section 202-40 of the ITAA 1997? | 3. Will a franking debit arise in the franking account of CCo as a result of the application of section 204-15 of the ITAA 1997? | 4. Will the Commissioner make a determination under paragraph 204-30(3)(a) of the ITAA 1997 that a franking debit arises in the franking account of CCo in relation to Distributions paid in respect of the Note? | 5. Will the Commissioner make a determination under paragraph 177EA(5)(a) of the Income Tax Assessment Act 1936 (ITAA 1936) that a franking debit of CCo arises in relation to Distributions paid in respect of the Note? | 6. Will the Commissioner make a determination under subsection 45C(3) of the ITAA 1936 for a franking debit to arise in CCos franking account? | 7. Will the Note be subject to the commercial debt forgiveness provisions in Division 245 of the ITAA 1997? | 8. Will an assessable profit or gain arise for CCo 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, on the Exchange, or Redemption? | 9. Will CCo be required to recognise gains and losses under Division 230 of the ITAA 1997 in relation to the Note? | 10. Will the share capital account of the Issuer become tainted, within the meaning of Division 197 of the ITAA 1997, upon the issue of the Notes, on the Exchange, or on Redemption? | Decision | The Commissioner ruled that: | 1. Yes. The Notes will be treated as an equity interest (as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)) under section 974-70 of the ITAA 1997. | 2. Yes. The Distributions paid in respect of the Notes will be non-share dividends that are frankable distributions within the meaning of section 202-40 of the ITAA 1997. | 3. No. A franking debit will not arise in the franking account of CCo as a result of the application of section 204-15 of the ITAA 1997. | 4. No. The Commissioner will not make a determination under paragraph 204-30(3)(a) of the ITAA 1997 that a franking debit arises in the franking account of CCo in relation to Distributions paid in respect of the Notes. | 5. No. The Commissioner will not make a determination under paragraph 177EA(5)(a) of the Income Tax Assessment Act 1936 (ITAA 1936) that a franking debit of CCo arises in relation to Distributions paid in respect of the Notes. | 6. No. The Commissioner will not make a determination under subsection 45C(3) of the ITAA 1936 for a franking debit to arise in CCos franking account. | 7. No. The Notes will not be subject to the commercial debt forgiveness provisions in Division 245 of the ITAA 1997? | 8. No. An assessable profit or gain will not arise for CCo 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, on the Exchange, or Redemption. | 9. No. CCo will not be required to recognise gains and losses under Division 230 of the ITAA 1997 in relation to the Notes. | 10. No. The share capital account of the Issuer will not become tainted, within the meaning of Division 197 of the ITAA 1997, upon the issue of the Notes, on the Exchange, or on Redemption.