Private ruling: Tier 1 capital raising
Date of advice: 26 May 2022
Published: September 2022

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 (ITAA 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 ITAA 1997? | A2: Yes. | Q3: Will section 204-15 of the ITAA 1997 apply to the issue of the Instrument? | A3: No. | Q4: Will section 204-30 of the ITAA 1997 apply to the issue of the Instrument? | A4: No. | Q5: Will section 177EA of the Income Tax Assessment Act 1936 (ITAA 1936) apply to the issue of the Instrument? | A5: No. | Q6: Will the Commissioner make a determination under subsection 45C(3) of the ITAA 1936 in relation to the issue of the Instrument, including the payment of distributions or a conversion, redemption or resale? | A6: No. | Q7: Will the Instrument 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 Instrument or the issue of ordinary shares on conversion, or on redemption? | A8: No. | Q9: Will the issue of the Instrument, 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 Instrument? | 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 Instrument, 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 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 section 104-35 | Income Tax Assessment Act 1997 Division 197 | Income Tax Assessment Act 1997 section 202-40 | 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 section 995-1 | Income Tax Assessment Act 1936 subsection 45C(3) | Income Tax Assessment Act 1936 section 177EA