Class Ruling CR 2017/90
Date of effect: 1 July 2017

What this ruling is about: 1. This Ruling sets out the Commissioner's opinion on the way in which the relevant provision(s) identified below apply to the defined class of entities, who take part in the scheme to which this Ruling relates. Relevant provisions 2. The relevant provisions dealt with in this Ruling are: Class of entities 3. The class of entities to which this Ruling applies are investors (referred to as Holders) who acquire fully paid, unsecured, subordinated, convertible notes issued by the Warwick Credit Union Ltd (Warwick) called the Warwick Capital Notes (Notes) and who: 4. The class of entities to which this Ruling applies does not extend to Holders of the Notes who did not acquire their Notes by initial application under the Replacement Offer Information Statement dated 13 November 2017 issued by Warwick. Qualifications 5. This Ruling does not deal with how the taxation law applies to Holders who hold their Notes as trading stock or revenue assets. 6. This Ruling does not consider how the gross-up and tax offset rules in Division 207 of the ITAA 1997 apply to partnership or trustee Holders, or to indirect distributions to partners in a partnership, or beneficiaries or trustees of a trust. 7. This Ruling does not deal with how the taxation law applies to Warwick in relation to the issue of the Notes. 8. The Commissioner makes this Ruling based on the precise scheme identified in this Ruling. 9. The class of entities defined in this Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 12 to 47 of this Ruling. 10. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then:

Class of entities or scheme: 3. The class of entities to which this Ruling applies are investors (referred to as Holders) who acquire fully paid, unsecured, subordinated, convertible notes issued by the Warwick Credit Union Ltd (Warwick) called the Warwick Capital Notes (Notes) and who: 4. The class of entities to which this Ruling applies does not extend to Holders of the Notes who did not acquire their Notes by initial application under the Replacement Offer Information Statement dated 13 November 2017 issued by Warwick. | Qualifications: 5. This Ruling does not deal with how the taxation law applies to Holders who hold their Notes as trading stock or revenue assets. 6. This Ruling does not consider how the gross-up and tax offset rules in Division 207 of the ITAA 1997 apply to partnership or trustee Holders, or to indirect distributions to partners in a partnership, or beneficiaries or trustees of a trust. 7. This Ruling does not deal with how the taxation law applies to Warwick in relation to the issue of the Notes. 8. The Commissioner makes this Ruling based on the precise scheme identified in this Ruling. 9. The class of entities defined in this Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 12 to 47 of this Ruling. 10. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then: 11. This Ruling applies from 1 July 2017 to 30 June 2027. The Ruling continues to apply after 30 June 2027 to all entities within the specified class who entered into the specified scheme during the term of the Ruling. However, this Ruling will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of this Ruling (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). 12. The following description of the scheme is based on information provided by the applicant. The following documents, or relevant parts of them form part of and are to be read with the description: Note: certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under Freedom of Information legislation. 13. In this Ruling, unless otherwise defined, capitalised terms take their meaning as specified in the Replacement Offer Information Statement. | Background: 14. Warwick is an authorised deposit-taking institution (ADI) regulated by the Australian Prudential Regulation Authority (APRA). 15. The Replacement Offer Information Statement relates to the offer of the Notes to raise $10,000,000 (the Offer) with the ability to raise a higher or lower amount, in order to satisfy Warwick's regulatory capital requirements. The funds raised from the issue of the Notes will be used for the general business purposes of Warwick in Australia. 16. APRA has confirmed that the Notes will be treated as Additional Tier 1 Capital under the Prudential Standard APS 111 implemented under the Basel III capital reforms (commencing from 1 January 2013). 17. The issue date for the Notes is 15 December 2017. The Notes will not be listed on the Australian Securities Exchange or any other exchange. | Main features of the Notes: 18. The Notes are fully paid, perpetual, unsecured, subordinated, convertible notes issued by Warwick. 19. The issue price of each Note is AUD $100 and will be fully paid on issue. 20. Each Note has a Face Value of AUD $100 (Face Value). 21. A Holder will not have any rights under the Notes to attend or vote at any general meetings of the Warwick shareholders. 22. The Notes are subject to Conversion and Redemption. In particular, some or all of the Notes may be Converted or Written off if a Non-Viability Trigger Event occurs. 23. There is no certainty that the Notes will be Converted or Redeemed as a Non-Viability Trigger Event may not occur and in any event, APRA's written approval may not be granted and Warwick may be unwilling to Convert or Redeem the Notes. 24. Holders of the Notes do not have a right to require redemption of the Notes. | Distribution calculation: 25. Subject to the conditions outlined at paragraphs 28 to 29 each Note entitles the Holder to receive on the relevant Distribution Payment Date, a distribution on the Face Value of the Notes (Distribution), calculated using the following formula: Distribution = [Distribution Rate * Face Value * N] / 365 (1 - T) / {1 - [T x (1 - F)]} 26. Distributions are expected to be fully franked. 27. Subject to the conditions in paragraph 28, Distributions will be payable in arrear on the Distribution Payment Dates of 15 March, 15 June, 15 September and 15 December of each year, commencing on 15 March 2018 until the Notes are Converted or Redeemed. Distributions are also payable on the date on which a Conversion or Redemption of the Notes occurs. | Distribution conditions: 28. The payment of any Distribution on a Distribution Payment date is subject to: 29. Distributions are non-cumulative and interest does not accrue on any unpaid Distributions. Distributions are only payable in cash. If a distribution is not paid because the relevant conditions are not satisfied or because of any other reason, Warwick has no liability to pay such Distribution to the Holder and the Holder has no claim or right to apply for winding up in respect of such non-payment. Non-payment of a Distribution does not constitute an event of default. 30. Subject to certain exceptions, where a Distribution is not paid in full on a Distribution Payment date, Warwick is restricted from declaring or determining to pay or pay a dividend in relation to any MEIs (assuming that MEIs are on issue at that time) without the approval of a Special Resolution. | Conversion on Trigger Event: 31. Conversion of the Notes may occur on the occurrence of a Non-viability Trigger Event. 32. A Non-Viability Trigger Event occurs when APRA notifies Warwick in writing that it believes: 33. If a Non-Viability Trigger Event occurs, Warwick must Convert all or some of the Notes to MEIs or Write-Off all or some Perpetual Subordinated Instruments (which includes the Notes). 34. Conversion of the relevant Notes will be taken to have occurred immediately on the Trigger Event Conversion Date. 35. If, for any reason, Conversion of any of the Notes fails to take effect and Warwick is not otherwise able to issue the MEIs required to be issued in respect of such Conversion within five Business Days of the Trigger Event Conversion Date, the Notes will be written off and the relevant Holders' rights (including to Distributions and the Face Value and any other payments) in relation to such Notes are immediately and irrevocably terminated and such termination will be taken to have occurred immediately on the Trigger Event Conversion Date. | MEIs obtained on Conversion: 36. A Conversion of the Notes into MEIs is achieved through: 37. MEIs are a form of interest qualifying as Common Equity Tier 1 Capital under the Prudential Standard APS 111 that are able to be issued by a mutually owned credit union regulated as an ADI upon conversion of the Notes. Warwick has obtained APRA approval for the issuance of the Notes that may convert into MEIs. 38. The MEIs into which the Notes may convert are perpetual interests in the capital of Warwick that on the event of a winding-up or liquidation rank equally with the other members' interests in the capital of Warwick forming part of Warwick's Common Equity Tier 1 capital, and constitute the most subordinated claim in the event of a winding up of Warwick. 39. Payments of distributions on the MEIs constitute dividends, and are within the absolute discretion of Warwick and non-cumulative. Distributions are only payable in cash. If a distribution is not paid because the relevant conditions are not satisfied or because of any other reason, Warwick has no liability to pay such distributions to the Holder and the Holder has no claim or right to apply for winding up in respect of such non-payment. Non-payment of a distribution does not constitute an event of default. 40. Where Warwick elects to make a distribution on MEIs, the distribution is calculated as being the proportion of all MEIs in Warwick held by the relevant holder multiplied by the income of Warwick for the relevant period determined according to ordinary concepts that is available for distribution after payment of, or provision for, costs, expenses and outgoings in accordance with normal concepts. | Redemption: 41. Warwick may at its option Redeem: 42. Warwick will Redeem each Note for cash equal to their Face Value. 43. Redemption requires the prior written approval of APRA. Approval is at the discretion of APRA and may or may not be given. 44. Upon payment of the Redemption Price, all other rights conferred, or restrictions imposed, by the Note will no longer have effect. 45. An Optional Redemption Date is also a Distribution Payment Date which means Holders will receive any Distribution entitlements up to and including the Optional Redemption Date (subject to the Distribution Payment Conditions described in paragraph 28). Redemption may occur even if Warwick, in its absolute discretion, does not pay a Distribution for the final Distribution Period. 46. Holders do not have a right to request Redemption of their Notes at any time. | Other matters and assumptions: 47. The Ruling is made on the basis that: | Notes are non-share equity interests: 48. The Notes are an equity interest under item 4 of the table in subsection 974-75(1) of the ITAA 1997. 49. As the Notes are equity interests that are not solely shares, they are non-share equity interests under subsection 995-1(1) of the ITAA 1997. | Notes will not be traditional securities: 50. The Notes are not a traditional security under subsection 26BB(1) of the ITAA 1936. | Notes will not be qualifying securities: 51. The Notes will not be qualifying securities under subsection 159GP(1) of the ITAA 1936. | MEIs are shares: 52. MEIs will constitute shares under subsection 995-1(1) of the ITAA 1997. | Acquisition time of the Notes: 53. Under item 2 of the table in section 109-10 of the ITAA 1997, a Holder will acquire a Note on 15 December 2017 being the date the contract for the issue of a Note is entered into. | Cost base and reduced cost base of each Note: 54. The first element of the cost base and reduced cost base of each Note is $100, being the money paid by the Holder to acquire the Note from Warwick (subsections 110-25(2) and 110-55(2) of the ITAA 1997). | Conversion of the Notes - CGT implications: 55. CGT event C2 (section 104-25 of the ITAA 1997) will happen for Holders on Conversion of the Notes into MEIs. 56. Any capital gain or capital loss made by a Holder from CGT event C2 happening on Conversion of Notes will be disregarded (subsection 130-60(3) of the ITAA 1997). | Cost base and reduced cost base of each MEI acquired on conversion: 57. On Conversion, Subdivision 130-C of the ITAA 1997 will apply so that the first element of the cost base and reduced cost base of each MEI acquired from Conversion will be equal to the cost base and reduced cost base of each Note at the time of Conversion (item 2 of the table in subsection 130-60(1) of the ITAA 1997). | Acquisition time of the MEIs acquired on conversion: 58. MEIs acquired by the Holders on Conversion of the Notes will be taken to have been acquired when the Conversion happens on the relevant Trigger Event Conversion Date (subsection 130-60(2) of the ITAA 1997). | Allotment of MEIs on Conversion neither a dividend nor a non-share dividend: 59. The issue of MEIs to Holders of Notes on Conversion will not result in Holders being taken to have received a dividend as defined in subsection 6(1) of the ITAA 1936. 60. The issue of MEIs to Holders of Notes on Conversion will not result in Holders being taken to have received a non-share dividend under subsection 974-120(2) of the ITAA 1936. 61. Accordingly, the issue of MEIs to Holders of Notes on Conversion should not be included in the Holders assessable income under subparagraph 44(1)(a)(i) or 44(1)(a)(ii) of the ITAA 1936. | Section 45 of the ITAA 1936: 62. Section 45 of the ITAA 1936 will not apply to treat the value of the MEIs issued to the Holders on Conversion as an unfrankable dividend paid by Warwick. | Section 45A of the ITAA 1936: 63. The Commissioner will not make a determination under subsection 45A(2) of the ITAA 1936 that section 45C of the ITAA 1936 applies to treat the whole, or part of, a capital benefit that arises on Conversion or Redemption of the Notes as an unfranked dividend in the hands of Holders. | Section 45B of the ITAA 1936: 64. The Commissioner will not make a determination under paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies to treat the whole, or part of, a capital benefit that arises on Conversion or Redemption of the Notes as an unfranked dividend in the hands of Holders. | Inclusion of Distributions and franking credits in assessable income: 65. Distributions paid in respect of each Note are non-share dividends under section 974-120 of the ITAA 1997 and must be included in the Holders' assessable income (subparagraph 44(1)(a)(ii) of the ITAA 1936). 66. Holders must also include in their assessable income an amount equal to the franking credits attached to the Distribution (subsection 207-20(1) of the ITAA 1997). | Entitlement to a tax offset for franking credits: 67. Holders will be entitled to a tax offset equal to the franking credit received on Distributions paid in respect of the Notes (subsection 207-20(2) of the ITAA 1997) unless the Distribution is exempt income or non-assessable non-exempt income in the hands of the Holder and none of the exceptions in Subdivision 207-E of the ITAA 1997 apply. | Exempt income or non-assessable non-exempt income: 68. If the Distribution (or part of it) is either exempt income or non-assessable non-exempt income in the hands of the relevant Holder, then the amount of any franking credit on Distribution is not included in the assessable income of the Holder and the Holder is not entitled to a tax offset under Division 207 of the ITAA 1997 (Subdivision 207-D of the ITAA 1997) unless any of the exceptions in Subdivision 207-E of the ITAA 1997 apply. | Franking credit subject to the refundable tax offset rules: 69. Holders who are entitled to a tax offset under subsection 207-20(2) of the ITAA 1997, in respect of the franking credits received in relation to the Notes, will be subject to the refundable tax offset rules in Division 67 of the ITAA 1997, unless they are specifically excluded under section 67-25 of the ITAA 1997. | Imputation benefits - streaming of imputation benefits: 70. The Commissioner will not make a determination under paragraph 204-30(3)(c) of the ITAA 1997 to deny the whole, or any part, of the imputation benefits received by a Holder in relation to Distributions paid in respect of the Notes. | Dividend stripping operation: 71. Distributions on the Notes will not be made as part of a dividend stripping operation for the purposes of paragraph 207-145(1)(d) and section 207-155 of the ITAA 1997. | Section 177EA of the ITAA 1936: 72. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits received by Holders in relation to Distributions paid in respect of the Notes. | Gross-up and tax offset denied in certain circumstances: 73. Section 207-145 of the ITAA 1997 will not apply to the whole, or any part, of the Distributions paid to Holders. Accordingly, section 207-145 of the ITAA 1997 will not adjust the gross-up of the Holders' assessable income to exclude the franking credit, nor will it deny the tax offset to which the Holders would have otherwise been entitled. Commissioner of Taxation 20 December 2017 | Notes are non-share equity interests: 74. A non-share equity interest is defined under section 995-1(1) of the ITAA 1997 to mean an equity interest in the company that is not solely a share. 75. Paragraph (b) of item 4 of the table in subsection 974-75(1) of the ITAA 1997 provides that an interest is an equity interest if it is an interest issued by the company that is an interest that will, or may, convert into an equity interest in the company. 76. Each Note may be converted into an MEI if a Non-Viability Trigger Event occurs. MEIs are an equity interest within the meaning of item 1 of the table in subsection 974-75(1) of the ITAA 1997. Therefore, the Notes are equity interests under paragraph (b) of item 4 of the table in subsection 974-75(1) of the ITAA 1997. 77. For the Notes to be an equity interest, they must also constitute a financing arrangement as defined under 974-130(1) of the ITAA 1997. Each Note is a financing arrangement for Warwick as it enables Warwick to raise finance. 78. The Notes can only be an equity interest if they are not a debt interest. An important requirement of a debt interest is that the entity that issues the debt instruments will have an effectively non-contingent obligation (ENCO) to provide benefits under the scheme (paragraph 974-20(1)(d) of the ITAA 1997). The Notes will not satisfy the ENCO requirement because: 79. As the Notes will not satisfy the ENCO requirement, the Notes do not constitute debt interests in Warwick and section 974-70(1) of the ITAA 1997 will not prevent the Notes from being characterised as an equity interest in Warwick. 80. As the Notes are an equity interest that is not solely a share, they are a non-share equity interest within the meaning of section 995-1(1) of the ITAA 1997. | Notes will not be traditional securities: 81. A traditional security is defined in subsection 26BB(1) of the ITAA 1936 as a security held by the taxpayer that: 82. The term 'security' is defined in subsection 26BB(1) of the ITAA 1936 by reference to subsection 159GP(1) of the ITAA 1936. Pursuant to subsection 159GP(1) of the ITAA 1936, 'security' means: 83. Paragraph 159GP(1)(a) of the ITAA 1936 will not apply because a Note is not stock, a bond, debenture, certificate of entitlement, bill of exchange, or a promissory note. 84. The term 'other security' in paragraph 159GP(1)(a) of the ITAA 1936 only encompasses instruments that evidence an obligation on the part of the issuer or drawer to pay an amount to the holder or acceptor, whether during the term of the instrument or at its maturity. The types of securities referred to in paragraph 159GP(1)(a) of the definition of security will generally be recognised as debt instruments (Taxation Ruling TR 96/14 Income tax: traditional securities). The Note Terms do not evidence an obligation on the part of Warwick to pay an amount to the Holder as any payments are at the absolute discretion of Warwick. 85. Paragraphs 159GP(1)(b) and 159GP(1)(c) of the ITAA 1936 do not apply because the Note is neither a deposit with a bank or other financial institution, nor a secured or unsecured loan. 86. Paragraph 159GP(1)(d) of the ITAA 1936 will only apply to those contracts that have debt like obligations (TR 96/14). 87. The Note Terms do not evidence a liability by Warwick to pay an amount or amounts to Holders of the Notes during the term of the instrument or at maturity. 88. The Notes are perpetual and Holders do not have a right to require Redemption. 89. The payment by Warwick of Distributions is subject to certain conditions. Distributions are paid at the discretion of Warwick and are non-cumulative. If a Distribution is not paid, Warwick has no liability to pay the Distribution; Holders have no claim in respect of such non-payment; and, such non-payment does not constitute an event of default. 90. Furthermore, the Note Terms provide for the Conversion of the Notes in return for Warwick allotting and issuing the Conversion number of MEIs based on the Face Value of the Notes and a formula set out in the Note Terms for each Note held by the Holders. Warwick does not have to Convert the Notes if it is unable to for any reason. In that case, the Notes will be Written-Off. Warwick cannot be said to have a liability to pay an amount under the Note Terms pursuant to the Conversion. 91. Redemption of a Note is possible. However it is at the discretion of Warwick on an Optional Redemption Date; or, upon the occurrence of certain events, at the discretion of Warwick, and in both cases requires the prior written approval of APRA. Warwick cannot be said to have a liability to pay an amount under the Note Terms. 92. Warwick will not become liable to pay an amount in respect of a Note upon winding up as it would be expected that, before winding up commences, the Note would either be converted into an MEI pursuant to a Non-Viability Trigger Event (in which case any distribution would be made to the Holders as shareholders as opposed to under the Note Terms), or Holders' rights would be terminated where Warwick is not able to allot and issue an MEI within the time required by the Note Terms. 93. For the reasons above, the Note Terms do not establish any liability on Warwick to pay an amount that exhibits the debt like obligation as contemplated by paragraph 159GP(1)(d) of the ITAA 1936. 94. As the Notes are not a 'security' within the meaning of subsection 159GP(1) of the ITAA 1936, it cannot be a 'traditional security' under subsection 26BB of the ITAA 1936. | Notes will not be qualifying securities: 95. Subsection 159GP(1) of the ITAA 1936 defines a 'qualifying security' as a 'security' of a certain kind. 96. As the Notes are not a 'security' within the meaning of the definition of 'security' in subsection 159GP(1) of the ITAA 1936, the Notes are not a 'qualifying security' within the meaning of section 159GP(1) of the ITAA 1936. | MEIs are shares: 97. The term 'share' is defined in subsection 995-1(1) of the ITAA 1997 as a share in the capital of the company and includes stock. Under subsection 6(1) of the ITAA 1936, the term 'share' has the same meaning as subsection 995-1(1) of the ITAA 1997. 98. An MEI in Warwick will consist of an interest in the capital of Warwick that provides its Holder the right to participate in dividends whilst the company is a going concern and a right to a proportionate distribution of Warwick's surplus assets available for members of the company upon winding up. Furthermore, an MEI is a chose in action which entitles the Holder to the rights and subjects them to the liabilities as provided for by Warwick's Constitution and by the Corporations Act 2001. 99. Therefore, MEIs constitute 'shares' as defined in subsection 995-1(1) of the ITAA 1997. | Acquisition time of the Notes: 100. An equity interest that is issued or allotted by a company is acquired when the contract is entered into or, if there is no contract, when the equity interests are issued or allotted (item 2 of the table in section 109-10 of the ITAA 1997). 101. The Notes are equity interests in Warwick for the purposes of Division 974 of the ITAA 1997. When an investor's application for the Notes is accepted by Warwick, this leads to the formation of a contract for the issue of the Notes to the investor (who will become a Holder). Under item 2 of the table in section 109-10 of the ITAA 1997, a Holder will acquire their Notes on 15 December 2017, being the date on which the contract for the issue of the Notes is entered into. | Cost base and reduced cost base of each Note: 102. The first element of the cost base and reduced cost base of a CGT asset includes the money paid, or required to be paid, in respect of acquiring the CGT asset (paragraph 110-25(2)(a) of the ITAA 1997 and subsection 110-55(2) of the ITAA 1997). 103. The issue price of each Note is $100. Accordingly, when the Notes are issued, the first element of the cost base and reduced cost base of each Note is $100. | Conversion of the Notes - CGT implications: 104. CGT event C2 will happen to Holders on Conversion of the Notes. Under paragraph 104-25(1)(f) of the ITAA 1997, CGT event C2 happens if an entity's ownership of an intangible CGT asset ends by the asset (if it is a convertible interest) being converted. 105. The Notes are convertible interests for the purposes of subsection 995-1(1) of the ITAA 1997 as they are an equity interest under item 4 of the table in section 974-75(1) of the ITAA 1997. Conversion of the Notes for MEIs constitutes the conversion of a convertible interest. 106. Conversion of the Notes happens as part of a conversion to which Subdivision 130-C of the ITAA 1997 applies because Holders will acquire shares (MEIs) on Conversion of the Notes. Under subsection 130-60(3) of the ITAA 1997, a capital gain or capital loss made from converting a convertible interest is disregarded. As such, any capital gain or capital loss made by a Holder from CGT event C2 happening on Conversion of the Notes will be disregarded. | Cost base and reduced cost base of each MEI acquired on conversion: 107. On Conversion, Subdivision 130-C of the ITAA 1997 will apply so that the first element of the cost base and reduced cost base of each MEI acquired from the Conversion of the Notes will be a pro-rata portion of the cost base and reduced cost base of each Note at the time of Conversion (item 2 of the table in subsection 130-60(1) of the ITAA 1997). | Acquisition time of the MEIs acquired on conversion: 108. MEIs acquired on Conversion of the Notes (being convertible interests) will be taken to be acquired when the Conversion happens on the relevant Trigger Event Conversion Date (subsection 130-60(2) of the ITAA 1997). | Allotment of MEIs on Conversion neither a dividend nor a non-share dividend: 109. Under subparagraph 44(1)(a)(i) of the ITAA 1936 the assessable income of a shareholder, who is a resident, includes 'dividends (other than non-share dividends)' that they receive. 110. The issue of MEIs to Holders on Conversion is a distribution of property to Holders. As the MEIs will not be issued to the Holders of the Notes as shareholders of Warwick, but by virtue of the Holders' rights as holders of the Notes, the issue of MEIs to Holders of Notes on Conversion will not constitute a dividend under subsection 6(1) of the ITAA 1936. Accordingly, the issue of MEIs on Conversion will not be included in assessable income under subparagraph 44(1)(a)(i) of the ITAA 1936. 111. The issue of MEIs to Holders on Conversion is a distribution of property to holders of a non-share equity interest and, accordingly, is a non-share distribution under subparagraph 974-115(b)(ii) of the ITAA 1997. Under subsection 974-120 of the ITAA 1997, a non-share distribution is a non-share dividend, except to the extent to which the company debits the distribution against the company's share capital account or non-share capital account. 112. On Conversion, Warwick will debit the Face Value of the Notes to its non-share capital account. Accordingly, the issue of MEIs on Conversion is not a non-share dividend and will not be included in assessable income under subparagraph 44(1)(a)(ii) of the ITAA 1936. | Section 45 of the ITAA 1936: 113. Section 45 of the ITAA 1936 applies where a company streams the provision of shares and the payment of minimally franked dividends to its shareholders in such a way that the shares are received by some shareholders and minimally franked dividends are received by other shareholders. Minimally franked dividends are dividends which are franked to less than 10%. 114. The Conversion of the Notes will not involve the streaming of MEIs and minimally franked Distributions. This is because Conversion simply involves the compulsory termination of some or all of the Notes and the application of the proceeds to acquire MEIs. Conversion does not involve the payment of Distributions. 115. Further, Warwick expects to fully frank all frankable distributions for the foreseeable future, and expects that future tax payments will generate sufficient franking credits for Warwick to continue its current policy of fully franking. 116. Based on the information provided and having regard to the circumstances of the scheme, section 45 of the ITAA 1936 will not apply to treat the value of the MEIs issued on Conversion, as an unfrankable dividend in the hands of Holders. | Section 45A of the ITAA 1936: 117. Section 45A of the ITAA 1936 applies in circumstances where a company streams the provision of capital benefits to certain shareholders who derive a greater benefit from the receipt of capital (the advantaged shareholders) and it is reasonable to assume that the other shareholders have received or will receive dividends (the disadvantaged shareholders). 118. The Commissioner may make a determination under subsection 45A(2) of the ITAA 1936 that section 45C of the ITAA 1936 applies. The effect of such a determination is that the capital benefit is taken to be an unfranked dividend. 119. A provision of capital benefits includes the provision to the equity holders of non-share equity interests in the company pursuant to paragraph 45A(3)(a) of the ITAA 1936. The issue of MEIs to Holders on Conversion of the Notes will constitute the provision of capital benefits. 120. The issue of MEIs on Conversion of the Notes is in effect a restatement of the Holder's interest in the capital of Warwick. In the absence of any other factors that would contribute to an alternative conclusion, there will not be any streaming of capital benefits. 121. The Redemption of the Notes will involve the provision of a capital benefit within the meaning of subsection 45A(3)(b) of the ITAA 1936 as it will constitute a non-share capital return (subsection 45A(3A) of the ITAA 1936). The amount paid to Holders on Redemption is limited to the amount of the Face Value of the Notes and any Distribution entitlements on the Notes will be separately paid as Distributions given that a date of Redemption occurs is also a Distribution Payment Date under the Note Terms. 122. Accordingly, it cannot be said that Holders would derive a greater benefit from capital benefits than other Warwick shareholders. Therefore, the Redemption or the issue of MEIs on Conversion of the Notes will not trigger the application of section 45A of the ITAA 1936. | Section 45B of the ITAA 1936: 123. Section 45B of the ITAA 1936 applies where certain capital benefits are provided to shareholders in substitution for dividends and the conditions in subsection 45B(2) of the ITAA 1936 are met. 124. Where section 45B of the ITAA 1936 applies to a scheme or transaction, the Commissioner may make a determination under paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies. The effect of such a determination is that the capital benefit is taken to be an unfranked dividend. 125. The issue of MEIs to Holders on Conversion will constitute a scheme under which the Holders are provided with a capital benefit by Warwick (paragraph 45B(5)(a) of the ITAA 1936). Similarly, Redemption of the Notes will also constitute a scheme under which the Holders are provided with a capital benefit by Warwick (paragraph 45B(5)(b) of the ITAA 1936 and subsection 45B(7) of the ITAA 1936)). 126. For the provision to apply, among other things, paragraph 45B(2)(c) of the ITAA 1936 requires that, having regard to the relevant circumstances of the scheme, it would be concluded that the person, or one of the persons, entered into the scheme or carried out the scheme or any part of the scheme for a purpose, other than an incidental purpose, of enabling a taxpayer to obtain a tax benefit. A non-exhaustive list of relevant circumstances of the scheme are provided in subsection 45B(8) of the ITAA 1936. 127. Having regard to the relevant circumstances surrounding the issue of the Notes, it cannot be concluded that Warwick, the Holders or any other person entered into or carried out the issue of the Notes for the purpose, other than an incidental purpose of enabling Holders to obtain a tax benefit. 128. Similarly, it cannot be said that Conversion or Redemption will involve any benefit provided to Holders that is in substitution for Distributions. The amount paid to Holders on Redemption is limited to an amount equal to the Face Value of the Notes and any Distribution entitlements on the Notes will be separately paid as a Distribution given that the date of Redemption will also be a Distribution Payment Date under the Note Terms. 129. Accordingly, the Commissioner will not make a determination under paragraph 45B(3)(b) of the ITAA 1936. | Inclusion of Distributions and franking credits in assessable income: 130. Subsection 44(1) of the ITAA 1936 provides that the assessable income of a resident shareholder in a company includes all dividends and non-share dividends paid to the shareholder by the company. 131. The Notes are non-share equity interests within the meaning of subsection 995-1(1) of the ITAA 1997. Distributions paid in respect of non-share equity interests are non-share distributions pursuant to section 974-115 of the ITAA 1997. Section 974-120 of the ITAA 1997 provides that all non-share distributions are non-share dividends unless a non-share dividend is debited against the company's non-share capital account or share capital account. 132. Distributions will not be debited against Warwick's non-share capital account or share capital account. Therefore, Distributions paid in respect of the Notes are non-share dividends under section 974-120 of the ITAA 1997. Accordingly, Holders must include in their assessable income Distributions paid in respect of the Notes under subparagraph 44(1)(a)(ii) of the ITAA 1936. 133. Distributions are expected to be franked. If a company makes a franked distribution to another entity, subsection 207-20(1) of the ITAA 1997 requires that the assessable income of the receiving entity include the amount of the franking credit on the distribution in addition to the amount of the franked distribution. Subsection 207-20(2) of the ITAA 1997 provides that the receiving entity is entitled to a tax offset equal to the franking credit on the distribution. 134. In accordance with subsection 207-20(1) of the ITAA 1997, any franking credit attached to a Distribution must also be included in the relevant Holder's assessable income for the income year in which the Distribution is made. | Entitlement to a tax offset for franking credits: 135. In accordance with subsection 207-20(2) of the ITAA 1997, Holders are entitled to receive a tax offset equal to the franking credit on a Distribution they receive, unless the Distribution is not included in the assessable income of the Holder and the Holder is not entitled to a tax offset under Division 207 of the ITAA 1997. Exempt income or non-assessable non-exempt income 136. Subdivision 207-D of the ITAA 1997 provides that if a Distribution (or part of it) is either exempt income or non-assessable non-exempt income in the hands of the relevant Holder, then the amount of any franking credit on the Distribution is not included in the assessable income of the Holder and the Holder is not entitled to a tax offset under Division 207 of the ITAA 1997. 137. However, Subdivision 207-E of the ITAA 1997 provides a number of exceptions to the rules in Subdivision 207-D of the ITAA 1997 for certain exempt institutions, trusts and life insurance companies. | Franking credit subject to the refundable tax offset rules: 138. Division 67 of the ITAA 1997 contains the refundable tax offset rules, and, in particular, sets out which tax offsets can be refunded if they exceed basic income tax liability. 139. Subsection 67-25(1) of the ITAA 1997 provides that tax offsets available under Division 207 of the ITAA 1997 are subject to the refundable tax offset rules, unless otherwise excluded. 140. Holders who are entitled to a tax offset under subsection 207-20(2) of the ITAA 1997, in respect of the franking credit received, will also be subject to the refundable tax offset rules in Division 67 of the ITAA 1997, unless they are specifically excluded under section 67-25 of the ITAA 1997. 141. The refundable tax offset rules ensure that certain taxpayers are entitled to a refund once their available tax offsets have been utilised to reduce any income tax liability to nil. 142. Entities excluded under section 67-25 of the ITAA 1997 include corporate tax entities (such as companies, corporate limited partnerships, corporate unit trusts and public trading trusts), unless they satisfy the requisite conditions as set out in subsections 67-25(1C) or 67-25(1D) of the ITAA 1997. | Imputation benefits - streaming of imputation benefits: 143. Subsection 204-30(1) of the ITAA 1997 empowers the Commissioner to make a determination under paragraph 204-30(3)(c) of the ITAA 1997 in cases where streaming of distributions is identified. 144. The term 'streaming' is not defined in the ITAA 1997. 145. At paragraphs 3.28 and 3.29 of the Explanatory Memorandum to the New Business Tax System (Imputation) Bill 2002 (Cth), which introduced Subdivision 204-D to the ITAA 1997, it is explained that: 146. As such, 'streaming' involves the distribution of franking credits in a way which provides an enhanced benefit to a certain category of members based upon their respective tax attributes. 147. The Notes will be available for investment by different types of investors. All Holders of the Notes will receive Distributions which are franked to the same percentage regardless of their tax attributes or their individual tax position. Warwick's policy in relation to the franking of its frankable distributions is not expected to change as a result of the issue of the Notes. 148. Further, the MEIs allotted on Conversion of the Notes will not constitute a 'distribution' as defined in section 960-120 of the ITAA 1997 for the purposes of section 204-30 of the ITAA 1997, as the issue of MEIs on a Conversion represents a substitution of one form of equity interest in the company with another and is not a dividend and should not be taken to be a dividend for tax purposes. The allotment of MEIs will not affect Warwick's dividend franking policy. 149. Based on the information provided, the Commissioner has concluded that the requisite element of streaming does not exist in relation to the franked distributions to be paid by Warwick to Holders. Accordingly, the Commissioner will not make a determination under paragraph 204-30(3)(c) of the ITAA 1997 to deny the whole, or any part, of the imputation benefits received by a Holder in relation to Distributions paid in respect of the Notes. | Section 177EA of the ITAA 1936: 150. Section 177EA of the ITAA 1936 is a general anti-avoidance provision that applies where one of the purposes (other than an incidental purpose) of the scheme is to obtain an imputation benefit. In these circumstances, subsection 177EA(5) of the ITAA 1936 enables the Commissioner to make a determination with the effect of either: 151. Pursuant to subsection 177EA(3) of the ITAA 1936, the provision applies if the following conditions are satisfied: 152. Subsection 177EA(12) of the ITAA 1936 extends the operation of section 177EA of the ITAA 1936 to non-share equity interests. 153. The Commissioner considers that the conditions in paragraphs 177EA(3)(a) to 177EA(3)(d) of the ITAA 1936 are satisfied because: 154. Accordingly, the issue is whether, having regard to the relevant circumstances of the scheme, it would be concluded that a person, or one of the persons, who entered into or carried out the scheme, did so for a purpose (whether or not the dominant purpose but not including an incidental purpose) of enabling the relevant taxpayer (Holders of the Notes) to obtain an imputation benefit (paragraph 177EA(3)(e) of the ITAA 1936). 155. Circumstances which are relevant in determining whether any person has the requisite purpose include, but are not limited to, the factors listed in subsection 177EA(17) of the ITAA 1936. 156. The relevant circumstances listed encompass a range of circumstances which taken individually or collectively could indicate the requisite purpose. Due to the diverse nature of these circumstances, some may or may not be present at any one time in relation to a particular scheme. 157. Based on the information provided and the qualifications set out in this Ruling, and having regard to all the relevant circumstances of the scheme, the Commissioner has concluded that the purpose of enabling the Holders to obtain imputation benefits is no more than incidental to Warwick's purpose of raising Tier 1 Capital to meet its capital adequacy requirements. 158. Accordingly, the Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits received by Holders in relation to Distributions paid in respect of the Notes. | Gross-up and tax offset denied in certain circumstances: 159. Subdivision 207-F of the ITAA 1997 creates the appropriate adjustment to cancel the effect of the gross-up and tax offset rules where the entity concerned has manipulated the imputation system in a manner that is not permitted under the income tax law. 160. Section 207-145 of the ITAA 1997 provides the circumstances that must exist before this adjustment can occur. Pursuant to subsection 207-145(1) of the ITAA 1997, a 'manipulation of the imputation system' may occur where a franked distribution is made to an entity in one or more of the following circumstances: 161. A person is a 'qualified person' for the purposes of Division 1A of former Part IIIAA of the ITAA 1936 if, generally speaking, they satisfy the holding period rule and the related payments rule (see former section 160APHO of the ITAA 1936). 162. By virtue of former section 160AOA of the ITAA 1936, the holding period rule and the related payments rule apply to non-share equity interests, equity holders and non-share dividends in the same way as they apply to shares, shareholders and dividends respectively. 163. The holding period rule applies where neither the holder nor an associate of the holder has made, is under an obligation to make, or is likely to make, a related payment in respect of the dividend (or non-share dividend), and requires the shares (or non-share equity interests) to have been continuously held at risk throughout the primary qualification period (former paragraph 160APHO(1)(a) of the ITAA 1936). 164. The related payments rule applies where the holder or an associate of the holder has made, is under an obligation to make, or is likely to make, a related payment in respect of the dividend (or non-share dividend) and requires the shares (or non-share equity interests) to have been continuously held at risk throughout the secondary qualification period (former paragraph 160APHO(1)(b) and former section 160APHN of the ITAA 1936). 165. The Notes are non-share equity interests that carry non-cumulative non-share dividend entitlements. Should a Distribution in respect of the Notes not be paid as scheduled, Warwick is not entitled to pay dividends on MEI (that is, the Distribution is in preference to MEI) unless Special Resolution is passed (broadly, a resolution passed by at least 75% of the Holders). Additionally, the Notes are ranked ahead of the MEIs upon a winding up. The Notes are therefore less risky than MEIs in Warwick and will be considered 'preference shares', as defined in former section 160APHD of the ITAA 1936. 166. A Holder of a Note will be a 'qualified person' in relation to a Distribution received in respect of their Notes, provided that: 167. In determining whether a shareholder is a 'qualified person' in relation to dividends paid on their shares, all 'positions' in respect of the shares are taken into account in identifying a 'net position' to ensure that there is no material diminution in the risks of loss or opportunities for gain. 168. Based on the information provided and the qualifications set out in this Ruling, the Commissioner has concluded that the Holders will be qualified persons. Therefore paragraph 207-145(1)(a) of the ITAA 1997 will not apply. 169. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 or paragraph 204-30(3)(c) of the ITAA 1997 to deny the imputation benefits attached to Distributions paid to Holders in respect of the Notes. 170. A distribution will be taken to be made as part of a dividend stripping operation, pursuant to paragraph 207-145(1)(d) of the ITAA 1997, where the distribution arose out of, or was made in the course of, a scheme or substantially similar arrangement that was in the nature of dividend stripping. 171. The Replacement Offer Information Statement and the Note Terms provide no indication that the offering of the Notes and the associated payment of franked Distributions to Holders in any way constitutes a dividend stripping arrangement. 172. Neither the Holders nor their connected entities will engage in distribution washing (within the meaning of section 207-157 of the ITAA 1997) in relation to Distributions on the Notes (unless entitled to the exception under subsection 207-157(4) of the ITAA 1997. 173. Accordingly, section 207-145 of the ITAA 1997 will not apply to adjust the Holders' assessable income to exclude the franking credit on the Distributions, nor will it deny the tax offset to which the Holders would otherwise be entitled. 174. The following is a detailed contents list for this Ruling: © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft

Ruling: Notes are non-share equity interests: 48. The Notes are an equity interest under item 4 of the table in subsection 974-75(1) of the ITAA 1997. 49. As the Notes are equity interests that are not solely shares, they are non-share equity interests under subsection 995-1(1) of the ITAA 1997. | Notes will not be traditional securities: 50. The Notes are not a traditional security under subsection 26BB(1) of the ITAA 1936. | Notes will not be qualifying securities: 51. The Notes will not be qualifying securities under subsection 159GP(1) of the ITAA 1936. | MEIs are shares: 52. MEIs will constitute shares under subsection 995-1(1) of the ITAA 1997. | Acquisition time of the Notes: 53. Under item 2 of the table in section 109-10 of the ITAA 1997, a Holder will acquire a Note on 15 December 2017 being the date the contract for the issue of a Note is entered into. | Cost base and reduced cost base of each Note: 54. The first element of the cost base and reduced cost base of each Note is $100, being the money paid by the Holder to acquire the Note from Warwick (subsections 110-25(2) and 110-55(2) of the ITAA 1997). | Conversion of the Notes - CGT implications: 55. CGT event C2 (section 104-25 of the ITAA 1997) will happen for Holders on Conversion of the Notes into MEIs. 56. Any capital gain or capital loss made by a Holder from CGT event C2 happening on Conversion of Notes will be disregarded (subsection 130-60(3) of the ITAA 1997). | Cost base and reduced cost base of each MEI acquired on conversion: 57. On Conversion, Subdivision 130-C of the ITAA 1997 will apply so that the first element of the cost base and reduced cost base of each MEI acquired from Conversion will be equal to the cost base and reduced cost base of each Note at the time of Conversion (item 2 of the table in subsection 130-60(1) of the ITAA 1997). | Acquisition time of the MEIs acquired on conversion: 58. MEIs acquired by the Holders on Conversion of the Notes will be taken to have been acquired when the Conversion happens on the relevant Trigger Event Conversion Date (subsection 130-60(2) of the ITAA 1997). | Allotment of MEIs on Conversion neither a dividend nor a non-share dividend: 59. The issue of MEIs to Holders of Notes on Conversion will not result in Holders being taken to have received a dividend as defined in subsection 6(1) of the ITAA 1936. 60. The issue of MEIs to Holders of Notes on Conversion will not result in Holders being taken to have received a non-share dividend under subsection 974-120(2) of the ITAA 1936. 61. Accordingly, the issue of MEIs to Holders of Notes on Conversion should not be included in the Holders assessable income under subparagraph 44(1)(a)(i) or 44(1)(a)(ii) of the ITAA 1936. | Section 45 of the ITAA 1936: 62. Section 45 of the ITAA 1936 will not apply to treat the value of the MEIs issued to the Holders on Conversion as an unfrankable dividend paid by Warwick. | Section 45A of the ITAA 1936: 63. The Commissioner will not make a determination under subsection 45A(2) of the ITAA 1936 that section 45C of the ITAA 1936 applies to treat the whole, or part of, a capital benefit that arises on Conversion or Redemption of the Notes as an unfranked dividend in the hands of Holders. | Section 45B of the ITAA 1936: 64. The Commissioner will not make a determination under paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies to treat the whole, or part of, a capital benefit that arises on Conversion or Redemption of the Notes as an unfranked dividend in the hands of Holders. | Inclusion of Distributions and franking credits in assessable income: 65. Distributions paid in respect of each Note are non-share dividends under section 974-120 of the ITAA 1997 and must be included in the Holders' assessable income (subparagraph 44(1)(a)(ii) of the ITAA 1936). 66. Holders must also include in their assessable income an amount equal to the franking credits attached to the Distribution (subsection 207-20(1) of the ITAA 1997). | Entitlement to a tax offset for franking credits: 67. Holders will be entitled to a tax offset equal to the franking credit received on Distributions paid in respect of the Notes (subsection 207-20(2) of the ITAA 1997) unless the Distribution is exempt income or non-assessable non-exempt income in the hands of the Holder and none of the exceptions in Subdivision 207-E of the ITAA 1997 apply. | Exempt income or non-assessable non-exempt income: 68. If the Distribution (or part of it) is either exempt income or non-assessable non-exempt income in the hands of the relevant Holder, then the amount of any franking credit on Distribution is not included in the assessable income of the Holder and the Holder is not entitled to a tax offset under Division 207 of the ITAA 1997 (Subdivision 207-D of the ITAA 1997) unless any of the exceptions in Subdivision 207-E of the ITAA 1997 apply. | Franking credit subject to the refundable tax offset rules: 69. Holders who are entitled to a tax offset under subsection 207-20(2) of the ITAA 1997, in respect of the franking credits received in relation to the Notes, will be subject to the refundable tax offset rules in Division 67 of the ITAA 1997, unless they are specifically excluded under section 67-25 of the ITAA 1997. | Imputation benefits - streaming of imputation benefits: 70. The Commissioner will not make a determination under paragraph 204-30(3)(c) of the ITAA 1997 to deny the whole, or any part, of the imputation benefits received by a Holder in relation to Distributions paid in respect of the Notes. | Dividend stripping operation: 71. Distributions on the Notes will not be made as part of a dividend stripping operation for the purposes of paragraph 207-145(1)(d) and section 207-155 of the ITAA 1997. | Section 177EA of the ITAA 1936: 72. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits received by Holders in relation to Distributions paid in respect of the Notes. | Gross-up and tax offset denied in certain circumstances: 73. Section 207-145 of the ITAA 1997 will not apply to the whole, or any part, of the Distributions paid to Holders. Accordingly, section 207-145 of the ITAA 1997 will not adjust the gross-up of the Holders' assessable income to exclude the franking credit, nor will it deny the tax offset to which the Holders would have otherwise been entitled. Commissioner of Taxation 20 December 2017


Appendix: Notes are non-share equity interests: 74. A non-share equity interest is defined under section 995-1(1) of the ITAA 1997 to mean an equity interest in the company that is not solely a share. 75. Paragraph (b) of item 4 of the table in subsection 974-75(1) of the ITAA 1997 provides that an interest is an equity interest if it is an interest issued by the company that is an interest that will, or may, convert into an equity interest in the company. 76. Each Note may be converted into an MEI if a Non-Viability Trigger Event occurs. MEIs are an equity interest within the meaning of item 1 of the table in subsection 974-75(1) of the ITAA 1997. Therefore, the Notes are equity interests under paragraph (b) of item 4 of the table in subsection 974-75(1) of the ITAA 1997. 77. For the Notes to be an equity interest, they must also constitute a financing arrangement as defined under 974-130(1) of the ITAA 1997. Each Note is a financing arrangement for Warwick as it enables Warwick to raise finance. 78. The Notes can only be an equity interest if they are not a debt interest. An important requirement of a debt interest is that the entity that issues the debt instruments will have an effectively non-contingent obligation (ENCO) to provide benefits under the scheme (paragraph 974-20(1)(d) of the ITAA 1997). The Notes will not satisfy the ENCO requirement because: 79. As the Notes will not satisfy the ENCO requirement, the Notes do not constitute debt interests in Warwick and section 974-70(1) of the ITAA 1997 will not prevent the Notes from being characterised as an equity interest in Warwick. 80. As the Notes are an equity interest that is not solely a share, they are a non-share equity interest within the meaning of section 995-1(1) of the ITAA 1997. | Notes will not be traditional securities: 81. A traditional security is defined in subsection 26BB(1) of the ITAA 1936 as a security held by the taxpayer that: 82. The term 'security' is defined in subsection 26BB(1) of the ITAA 1936 by reference to subsection 159GP(1) of the ITAA 1936. Pursuant to subsection 159GP(1) of the ITAA 1936, 'security' means: 83. Paragraph 159GP(1)(a) of the ITAA 1936 will not apply because a Note is not stock, a bond, debenture, certificate of entitlement, bill of exchange, or a promissory note. 84. The term 'other security' in paragraph 159GP(1)(a) of the ITAA 1936 only encompasses instruments that evidence an obligation on the part of the issuer or drawer to pay an amount to the holder or acceptor, whether during the term of the instrument or at its maturity. The types of securities referred to in paragraph 159GP(1)(a) of the definition of security will generally be recognised as debt instruments (Taxation Ruling TR 96/14 Income tax: traditional securities). The Note Terms do not evidence an obligation on the part of Warwick to pay an amount to the Holder as any payments are at the absolute discretion of Warwick. 85. Paragraphs 159GP(1)(b) and 159GP(1)(c) of the ITAA 1936 do not apply because the Note is neither a deposit with a bank or other financial institution, nor a secured or unsecured loan. 86. Paragraph 159GP(1)(d) of the ITAA 1936 will only apply to those contracts that have debt like obligations (TR 96/14). 87. The Note Terms do not evidence a liability by Warwick to pay an amount or amounts to Holders of the Notes during the term of the instrument or at maturity. 88. The Notes are perpetual and Holders do not have a right to require Redemption. 89. The payment by Warwick of Distributions is subject to certain conditions. Distributions are paid at the discretion of Warwick and are non-cumulative. If a Distribution is not paid, Warwick has no liability to pay the Distribution; Holders have no claim in respect of such non-payment; and, such non-payment does not constitute an event of default. 90. Furthermore, the Note Terms provide for the Conversion of the Notes in return for Warwick allotting and issuing the Conversion number of MEIs based on the Face Value of the Notes and a formula set out in the Note Terms for each Note held by the Holders. Warwick does not have to Convert the Notes if it is unable to for any reason. In that case, the Notes will be Written-Off. Warwick cannot be said to have a liability to pay an amount under the Note Terms pursuant to the Conversion. 91. Redemption of a Note is possible. However it is at the discretion of Warwick on an Optional Redemption Date; or, upon the occurrence of certain events, at the discretion of Warwick, and in both cases requires the prior written approval of APRA. Warwick cannot be said to have a liability to pay an amount under the Note Terms. 92. Warwick will not become liable to pay an amount in respect of a Note upon winding up as it would be expected that, before winding up commences, the Note would either be converted into an MEI pursuant to a Non-Viability Trigger Event (in which case any distribution would be made to the Holders as shareholders as opposed to under the Note Terms), or Holders' rights would be terminated where Warwick is not able to allot and issue an MEI within the time required by the Note Terms. 93. For the reasons above, the Note Terms do not establish any liability on Warwick to pay an amount that exhibits the debt like obligation as contemplated by paragraph 159GP(1)(d) of the ITAA 1936. 94. As the Notes are not a 'security' within the meaning of subsection 159GP(1) of the ITAA 1936, it cannot be a 'traditional security' under subsection 26BB of the ITAA 1936. | Notes will not be qualifying securities: 95. Subsection 159GP(1) of the ITAA 1936 defines a 'qualifying security' as a 'security' of a certain kind. 96. As the Notes are not a 'security' within the meaning of the definition of 'security' in subsection 159GP(1) of the ITAA 1936, the Notes are not a 'qualifying security' within the meaning of section 159GP(1) of the ITAA 1936. | MEIs are shares: 97. The term 'share' is defined in subsection 995-1(1) of the ITAA 1997 as a share in the capital of the company and includes stock. Under subsection 6(1) of the ITAA 1936, the term 'share' has the same meaning as subsection 995-1(1) of the ITAA 1997. 98. An MEI in Warwick will consist of an interest in the capital of Warwick that provides its Holder the right to participate in dividends whilst the company is a going concern and a right to a proportionate distribution of Warwick's surplus assets available for members of the company upon winding up. Furthermore, an MEI is a chose in action which entitles the Holder to the rights and subjects them to the liabilities as provided for by Warwick's Constitution and by the Corporations Act 2001. 99. Therefore, MEIs constitute 'shares' as defined in subsection 995-1(1) of the ITAA 1997. | Acquisition time of the Notes: 100. An equity interest that is issued or allotted by a company is acquired when the contract is entered into or, if there is no contract, when the equity interests are issued or allotted (item 2 of the table in section 109-10 of the ITAA 1997). 101. The Notes are equity interests in Warwick for the purposes of Division 974 of the ITAA 1997. When an investor's application for the Notes is accepted by Warwick, this leads to the formation of a contract for the issue of the Notes to the investor (who will become a Holder). Under item 2 of the table in section 109-10 of the ITAA 1997, a Holder will acquire their Notes on 15 December 2017, being the date on which the contract for the issue of the Notes is entered into. | Cost base and reduced cost base of each Note: 102. The first element of the cost base and reduced cost base of a CGT asset includes the money paid, or required to be paid, in respect of acquiring the CGT asset (paragraph 110-25(2)(a) of the ITAA 1997 and subsection 110-55(2) of the ITAA 1997). 103. The issue price of each Note is $100. Accordingly, when the Notes are issued, the first element of the cost base and reduced cost base of each Note is $100. | Conversion of the Notes - CGT implications: 104. CGT event C2 will happen to Holders on Conversion of the Notes. Under paragraph 104-25(1)(f) of the ITAA 1997, CGT event C2 happens if an entity's ownership of an intangible CGT asset ends by the asset (if it is a convertible interest) being converted. 105. The Notes are convertible interests for the purposes of subsection 995-1(1) of the ITAA 1997 as they are an equity interest under item 4 of the table in section 974-75(1) of the ITAA 1997. Conversion of the Notes for MEIs constitutes the conversion of a convertible interest. 106. Conversion of the Notes happens as part of a conversion to which Subdivision 130-C of the ITAA 1997 applies because Holders will acquire shares (MEIs) on Conversion of the Notes. Under subsection 130-60(3) of the ITAA 1997, a capital gain or capital loss made from converting a convertible interest is disregarded. As such, any capital gain or capital loss made by a Holder from CGT event C2 happening on Conversion of the Notes will be disregarded. | Cost base and reduced cost base of each MEI acquired on conversion: 107. On Conversion, Subdivision 130-C of the ITAA 1997 will apply so that the first element of the cost base and reduced cost base of each MEI acquired from the Conversion of the Notes will be a pro-rata portion of the cost base and reduced cost base of each Note at the time of Conversion (item 2 of the table in subsection 130-60(1) of the ITAA 1997). | Acquisition time of the MEIs acquired on conversion: 108. MEIs acquired on Conversion of the Notes (being convertible interests) will be taken to be acquired when the Conversion happens on the relevant Trigger Event Conversion Date (subsection 130-60(2) of the ITAA 1997). | Allotment of MEIs on Conversion neither a dividend nor a non-share dividend: 109. Under subparagraph 44(1)(a)(i) of the ITAA 1936 the assessable income of a shareholder, who is a resident, includes 'dividends (other than non-share dividends)' that they receive. 110. The issue of MEIs to Holders on Conversion is a distribution of property to Holders. As the MEIs will not be issued to the Holders of the Notes as shareholders of Warwick, but by virtue of the Holders' rights as holders of the Notes, the issue of MEIs to Holders of Notes on Conversion will not constitute a dividend under subsection 6(1) of the ITAA 1936. Accordingly, the issue of MEIs on Conversion will not be included in assessable income under subparagraph 44(1)(a)(i) of the ITAA 1936. 111. The issue of MEIs to Holders on Conversion is a distribution of property to holders of a non-share equity interest and, accordingly, is a non-share distribution under subparagraph 974-115(b)(ii) of the ITAA 1997. Under subsection 974-120 of the ITAA 1997, a non-share distribution is a non-share dividend, except to the extent to which the company debits the distribution against the company's share capital account or non-share capital account. 112. On Conversion, Warwick will debit the Face Value of the Notes to its non-share capital account. Accordingly, the issue of MEIs on Conversion is not a non-share dividend and will not be included in assessable income under subparagraph 44(1)(a)(ii) of the ITAA 1936. | Section 45 of the ITAA 1936: 113. Section 45 of the ITAA 1936 applies where a company streams the provision of shares and the payment of minimally franked dividends to its shareholders in such a way that the shares are received by some shareholders and minimally franked dividends are received by other shareholders. Minimally franked dividends are dividends which are franked to less than 10%. 114. The Conversion of the Notes will not involve the streaming of MEIs and minimally franked Distributions. This is because Conversion simply involves the compulsory termination of some or all of the Notes and the application of the proceeds to acquire MEIs. Conversion does not involve the payment of Distributions. 115. Further, Warwick expects to fully frank all frankable distributions for the foreseeable future, and expects that future tax payments will generate sufficient franking credits for Warwick to continue its current policy of fully franking. 116. Based on the information provided and having regard to the circumstances of the scheme, section 45 of the ITAA 1936 will not apply to treat the value of the MEIs issued on Conversion, as an unfrankable dividend in the hands of Holders. | Section 45A of the ITAA 1936: 117. Section 45A of the ITAA 1936 applies in circumstances where a company streams the provision of capital benefits to certain shareholders who derive a greater benefit from the receipt of capital (the advantaged shareholders) and it is reasonable to assume that the other shareholders have received or will receive dividends (the disadvantaged shareholders). 118. The Commissioner may make a determination under subsection 45A(2) of the ITAA 1936 that section 45C of the ITAA 1936 applies. The effect of such a determination is that the capital benefit is taken to be an unfranked dividend. 119. A provision of capital benefits includes the provision to the equity holders of non-share equity interests in the company pursuant to paragraph 45A(3)(a) of the ITAA 1936. The issue of MEIs to Holders on Conversion of the Notes will constitute the provision of capital benefits. 120. The issue of MEIs on Conversion of the Notes is in effect a restatement of the Holder's interest in the capital of Warwick. In the absence of any other factors that would contribute to an alternative conclusion, there will not be any streaming of capital benefits. 121. The Redemption of the Notes will involve the provision of a capital benefit within the meaning of subsection 45A(3)(b) of the ITAA 1936 as it will constitute a non-share capital return (subsection 45A(3A) of the ITAA 1936). The amount paid to Holders on Redemption is limited to the amount of the Face Value of the Notes and any Distribution entitlements on the Notes will be separately paid as Distributions given that a date of Redemption occurs is also a Distribution Payment Date under the Note Terms. 122. Accordingly, it cannot be said that Holders would derive a greater benefit from capital benefits than other Warwick shareholders. Therefore, the Redemption or the issue of MEIs on Conversion of the Notes will not trigger the application of section 45A of the ITAA 1936. | Section 45B of the ITAA 1936: 123. Section 45B of the ITAA 1936 applies where certain capital benefits are provided to shareholders in substitution for dividends and the conditions in subsection 45B(2) of the ITAA 1936 are met. 124. Where section 45B of the ITAA 1936 applies to a scheme or transaction, the Commissioner may make a determination under paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies. The effect of such a determination is that the capital benefit is taken to be an unfranked dividend. 125. The issue of MEIs to Holders on Conversion will constitute a scheme under which the Holders are provided with a capital benefit by Warwick (paragraph 45B(5)(a) of the ITAA 1936). Similarly, Redemption of the Notes will also constitute a scheme under which the Holders are provided with a capital benefit by Warwick (paragraph 45B(5)(b) of the ITAA 1936 and subsection 45B(7) of the ITAA 1936)). 126. For the provision to apply, among other things, paragraph 45B(2)(c) of the ITAA 1936 requires that, having regard to the relevant circumstances of the scheme, it would be concluded that the person, or one of the persons, entered into the scheme or carried out the scheme or any part of the scheme for a purpose, other than an incidental purpose, of enabling a taxpayer to obtain a tax benefit. A non-exhaustive list of relevant circumstances of the scheme are provided in subsection 45B(8) of the ITAA 1936. 127. Having regard to the relevant circumstances surrounding the issue of the Notes, it cannot be concluded that Warwick, the Holders or any other person entered into or carried out the issue of the Notes for the purpose, other than an incidental purpose of enabling Holders to obtain a tax benefit. 128. Similarly, it cannot be said that Conversion or Redemption will involve any benefit provided to Holders that is in substitution for Distributions. The amount paid to Holders on Redemption is limited to an amount equal to the Face Value of the Notes and any Distribution entitlements on the Notes will be separately paid as a Distribution given that the date of Redemption will also be a Distribution Payment Date under the Note Terms. 129. Accordingly, the Commissioner will not make a determination under paragraph 45B(3)(b) of the ITAA 1936. | Inclusion of Distributions and franking credits in assessable income: 130. Subsection 44(1) of the ITAA 1936 provides that the assessable income of a resident shareholder in a company includes all dividends and non-share dividends paid to the shareholder by the company. 131. The Notes are non-share equity interests within the meaning of subsection 995-1(1) of the ITAA 1997. Distributions paid in respect of non-share equity interests are non-share distributions pursuant to section 974-115 of the ITAA 1997. Section 974-120 of the ITAA 1997 provides that all non-share distributions are non-share dividends unless a non-share dividend is debited against the company's non-share capital account or share capital account. 132. Distributions will not be debited against Warwick's non-share capital account or share capital account. Therefore, Distributions paid in respect of the Notes are non-share dividends under section 974-120 of the ITAA 1997. Accordingly, Holders must include in their assessable income Distributions paid in respect of the Notes under subparagraph 44(1)(a)(ii) of the ITAA 1936. 133. Distributions are expected to be franked. If a company makes a franked distribution to another entity, subsection 207-20(1) of the ITAA 1997 requires that the assessable income of the receiving entity include the amount of the franking credit on the distribution in addition to the amount of the franked distribution. Subsection 207-20(2) of the ITAA 1997 provides that the receiving entity is entitled to a tax offset equal to the franking credit on the distribution. 134. In accordance with subsection 207-20(1) of the ITAA 1997, any franking credit attached to a Distribution must also be included in the relevant Holder's assessable income for the income year in which the Distribution is made. | Entitlement to a tax offset for franking credits: 135. In accordance with subsection 207-20(2) of the ITAA 1997, Holders are entitled to receive a tax offset equal to the franking credit on a Distribution they receive, unless the Distribution is not included in the assessable income of the Holder and the Holder is not entitled to a tax offset under Division 207 of the ITAA 1997. Exempt income or non-assessable non-exempt income 136. Subdivision 207-D of the ITAA 1997 provides that if a Distribution (or part of it) is either exempt income or non-assessable non-exempt income in the hands of the relevant Holder, then the amount of any franking credit on the Distribution is not included in the assessable income of the Holder and the Holder is not entitled to a tax offset under Division 207 of the ITAA 1997. 137. However, Subdivision 207-E of the ITAA 1997 provides a number of exceptions to the rules in Subdivision 207-D of the ITAA 1997 for certain exempt institutions, trusts and life insurance companies. | Franking credit subject to the refundable tax offset rules: 138. Division 67 of the ITAA 1997 contains the refundable tax offset rules, and, in particular, sets out which tax offsets can be refunded if they exceed basic income tax liability. 139. Subsection 67-25(1) of the ITAA 1997 provides that tax offsets available under Division 207 of the ITAA 1997 are subject to the refundable tax offset rules, unless otherwise excluded. 140. Holders who are entitled to a tax offset under subsection 207-20(2) of the ITAA 1997, in respect of the franking credit received, will also be subject to the refundable tax offset rules in Division 67 of the ITAA 1997, unless they are specifically excluded under section 67-25 of the ITAA 1997. 141. The refundable tax offset rules ensure that certain taxpayers are entitled to a refund once their available tax offsets have been utilised to reduce any income tax liability to nil. 142. Entities excluded under section 67-25 of the ITAA 1997 include corporate tax entities (such as companies, corporate limited partnerships, corporate unit trusts and public trading trusts), unless they satisfy the requisite conditions as set out in subsections 67-25(1C) or 67-25(1D) of the ITAA 1997. | Imputation benefits - streaming of imputation benefits: 143. Subsection 204-30(1) of the ITAA 1997 empowers the Commissioner to make a determination under paragraph 204-30(3)(c) of the ITAA 1997 in cases where streaming of distributions is identified. 144. The term 'streaming' is not defined in the ITAA 1997. 145. At paragraphs 3.28 and 3.29 of the Explanatory Memorandum to the New Business Tax System (Imputation) Bill 2002 (Cth), which introduced Subdivision 204-D to the ITAA 1997, it is explained that: 146. As such, 'streaming' involves the distribution of franking credits in a way which provides an enhanced benefit to a certain category of members based upon their respective tax attributes. 147. The Notes will be available for investment by different types of investors. All Holders of the Notes will receive Distributions which are franked to the same percentage regardless of their tax attributes or their individual tax position. Warwick's policy in relation to the franking of its frankable distributions is not expected to change as a result of the issue of the Notes. 148. Further, the MEIs allotted on Conversion of the Notes will not constitute a 'distribution' as defined in section 960-120 of the ITAA 1997 for the purposes of section 204-30 of the ITAA 1997, as the issue of MEIs on a Conversion represents a substitution of one form of equity interest in the company with another and is not a dividend and should not be taken to be a dividend for tax purposes. The allotment of MEIs will not affect Warwick's dividend franking policy. 149. Based on the information provided, the Commissioner has concluded that the requisite element of streaming does not exist in relation to the franked distributions to be paid by Warwick to Holders. Accordingly, the Commissioner will not make a determination under paragraph 204-30(3)(c) of the ITAA 1997 to deny the whole, or any part, of the imputation benefits received by a Holder in relation to Distributions paid in respect of the Notes. | Section 177EA of the ITAA 1936: 150. Section 177EA of the ITAA 1936 is a general anti-avoidance provision that applies where one of the purposes (other than an incidental purpose) of the scheme is to obtain an imputation benefit. In these circumstances, subsection 177EA(5) of the ITAA 1936 enables the Commissioner to make a determination with the effect of either: 151. Pursuant to subsection 177EA(3) of the ITAA 1936, the provision applies if the following conditions are satisfied: 152. Subsection 177EA(12) of the ITAA 1936 extends the operation of section 177EA of the ITAA 1936 to non-share equity interests. 153. The Commissioner considers that the conditions in paragraphs 177EA(3)(a) to 177EA(3)(d) of the ITAA 1936 are satisfied because: 154. Accordingly, the issue is whether, having regard to the relevant circumstances of the scheme, it would be concluded that a person, or one of the persons, who entered into or carried out the scheme, did so for a purpose (whether or not the dominant purpose but not including an incidental purpose) of enabling the relevant taxpayer (Holders of the Notes) to obtain an imputation benefit (paragraph 177EA(3)(e) of the ITAA 1936). 155. Circumstances which are relevant in determining whether any person has the requisite purpose include, but are not limited to, the factors listed in subsection 177EA(17) of the ITAA 1936. 156. The relevant circumstances listed encompass a range of circumstances which taken individually or collectively could indicate the requisite purpose. Due to the diverse nature of these circumstances, some may or may not be present at any one time in relation to a particular scheme. 157. Based on the information provided and the qualifications set out in this Ruling, and having regard to all the relevant circumstances of the scheme, the Commissioner has concluded that the purpose of enabling the Holders to obtain imputation benefits is no more than incidental to Warwick's purpose of raising Tier 1 Capital to meet its capital adequacy requirements. 158. Accordingly, the Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 to deny the whole, or any part, of the imputation benefits received by Holders in relation to Distributions paid in respect of the Notes. | Gross-up and tax offset denied in certain circumstances: 159. Subdivision 207-F of the ITAA 1997 creates the appropriate adjustment to cancel the effect of the gross-up and tax offset rules where the entity concerned has manipulated the imputation system in a manner that is not permitted under the income tax law. 160. Section 207-145 of the ITAA 1997 provides the circumstances that must exist before this adjustment can occur. Pursuant to subsection 207-145(1) of the ITAA 1997, a 'manipulation of the imputation system' may occur where a franked distribution is made to an entity in one or more of the following circumstances: 161. A person is a 'qualified person' for the purposes of Division 1A of former Part IIIAA of the ITAA 1936 if, generally speaking, they satisfy the holding period rule and the related payments rule (see former section 160APHO of the ITAA 1936). 162. By virtue of former section 160AOA of the ITAA 1936, the holding period rule and the related payments rule apply to non-share equity interests, equity holders and non-share dividends in the same way as they apply to shares, shareholders and dividends respectively. 163. The holding period rule applies where neither the holder nor an associate of the holder has made, is under an obligation to make, or is likely to make, a related payment in respect of the dividend (or non-share dividend), and requires the shares (or non-share equity interests) to have been continuously held at risk throughout the primary qualification period (former paragraph 160APHO(1)(a) of the ITAA 1936). 164. The related payments rule applies where the holder or an associate of the holder has made, is under an obligation to make, or is likely to make, a related payment in respect of the dividend (or non-share dividend) and requires the shares (or non-share equity interests) to have been continuously held at risk throughout the secondary qualification period (former paragraph 160APHO(1)(b) and former section 160APHN of the ITAA 1936). 165. The Notes are non-share equity interests that carry non-cumulative non-share dividend entitlements. Should a Distribution in respect of the Notes not be paid as scheduled, Warwick is not entitled to pay dividends on MEI (that is, the Distribution is in preference to MEI) unless Special Resolution is passed (broadly, a resolution passed by at least 75% of the Holders). Additionally, the Notes are ranked ahead of the MEIs upon a winding up. The Notes are therefore less risky than MEIs in Warwick and will be considered 'preference shares', as defined in former section 160APHD of the ITAA 1936. 166. A Holder of a Note will be a 'qualified person' in relation to a Distribution received in respect of their Notes, provided that: 167. In determining whether a shareholder is a 'qualified person' in relation to dividends paid on their shares, all 'positions' in respect of the shares are taken into account in identifying a 'net position' to ensure that there is no material diminution in the risks of loss or opportunities for gain. 168. Based on the information provided and the qualifications set out in this Ruling, the Commissioner has concluded that the Holders will be qualified persons. Therefore paragraph 207-145(1)(a) of the ITAA 1997 will not apply. 169. The Commissioner will not make a determination under paragraph 177EA(5)(b) of the ITAA 1936 or paragraph 204-30(3)(c) of the ITAA 1997 to deny the imputation benefits attached to Distributions paid to Holders in respect of the Notes. 170. A distribution will be taken to be made as part of a dividend stripping operation, pursuant to paragraph 207-145(1)(d) of the ITAA 1997, where the distribution arose out of, or was made in the course of, a scheme or substantially similar arrangement that was in the nature of dividend stripping. 171. The Replacement Offer Information Statement and the Note Terms provide no indication that the offering of the Notes and the associated payment of franked Distributions to Holders in any way constitutes a dividend stripping arrangement. 172. Neither the Holders nor their connected entities will engage in distribution washing (within the meaning of section 207-157 of the ITAA 1997) in relation to Distributions on the Notes (unless entitled to the exception under subsection 207-157(4) of the ITAA 1997. 173. Accordingly, section 207-145 of the ITAA 1997 will not apply to adjust the Holders' assessable income to exclude the franking credit on the Distributions, nor will it deny the tax offset to which the Holders would otherwise be entitled.


Summary - what this ruling is about | NOT LEGALLY BINDING SECTION: | A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. | If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. | Distribution Rate is calculated using the following formula: | Distribution Rate = (Market Rate + Margin) x Franking Adjustment Factor | Market Rate (expressed as a percentage per annum) means, for a Distribution Period, the rate for prime bank eligible securities having a 3 month tenor which is designated as 'AVG MID' on the Thomson Reuters Screen BBSW page (or any designation which replaces that designation on that page or any page which replaces that page) at approximately 10:15am on the first Business Day of the Distribution Period. However, if such rate does not appear on Thomson Reuters Screen BBSW page by 10:30am on that day, or if it does appear but Warwick determines that there is an obvious error in that rate, 'Market Rate' (for that day) will be the rate determined by Warwick having regard to comparable indices then available. | Margin means 6.30% per annum; and | 3.28 Streaming is selectively directing the flow of franked distributions to those members who can most benefit from imputation credits. | 3.29 The law uses an essentially objective test for streaming, although purpose may be relevant where future conduct is a relevant consideration. It will normally be apparent on the face of an arrangement that a strategy for streaming is being implemented. The distinguishing of members on the basis of their ability to use franking benefits is a key element of streaming. | Acquisition of the Notes - CGT implications | Cost base and reduced cost base of MEIs acquired on conversion | Appendix 2 - Detailed contents list


Related rulings: TR 96/14 TR 2006/10
Legislative references: ITAA 1936 ITAA 1936 6(1) ITAA 1936 26BB ITAA 1936 26BB(1) ITAA 1936 26BB(1)(b)(ii) ITAA 1936 44(1) ITAA 1936 44(1)(a)(i) ITAA 1936 44(1)(a)(ii) ITAA 1936 45 ITAA 1936 45A ITAA 1936 45A(2) ITAA 1936 45A(3)(a) ITAA 1936 45A(3)(b) ITAA 1936 45A(3A) ITAA 1936 45B ITAA 1936 45B(2) ITAA 1936 45B(2)(c) ITAA 1936 45B(3)(b) ITAA 1936 45B(5)(a) ITAA 1936 45B(5)(b) ITAA 1936 45B(7) ITAA 1936 45B(8) ITAA 1936 45C ITAA 1936 159GP ITAA 1936 159GP(1) ITAA 1936 159GP ITAA 1936 Div 1A Pt IIIAA ITAA 1936 160AOA ITAA 1936 160APHD ITAA 1936 160APHJ ITAA 1936 160APHM ITAA 1936 160APHN ITAA 1936 160APHO ITAA 1936 160APHO(1)(a) ITAA 1936 160APHO(1)(b) ITAA 1936 160APHO(2) ITAA 1936 160APHO(3) ITAA 1936 177EA ITAA 1936 177EA(3) ITAA 1936 177EA(3)(a) ITAA 1936 177EA(3)(b) ITAA 1936 177EA(3)(c) ITAA 1936 177EA(3)(d) ITAA 1936 177EA(3)(e) ITAA 1936 177EA(5) ITAA 1936 177EA(5)(b) ITAA 1936 177EA(12) ITAA 1936 177EA(12)(a) ITAA 1936 177EA(14)(a) ITAA 1936 177EA(17) ITAA 1997 ITAA 1997 Div 67 ITAA 1997 67-25 ITAA 1997 67-25(1) ITAA 1997 67-25(1C) ITAA 1997 67-25(1D) ITAA 1997 104-25 ITAA 1997 104-25(1)(f) ITAA 1997 109-10 ITAA 1997 110-25 ITAA 1997 110-25(2) ITAA 1997 110-25(2)(a) ITAA 1997 110-55(2) ITAA 1997 Subdiv 130-C ITAA 1997 130-60 ITAA 1997 130-60(1) ITAA 1997 130-60(2) ITAA 1997 130-60(3) ITAA 1997 202-40 ITAA 1997 202-45 ITAA 1997 Subdiv 204-D ITAA 1997 204-30 ITAA 1997 204-30(1) ITAA 1997 204-30(1)(a) ITAA 1997 204-30(1)(b) ITAA 1997 204-30(1)(c) ITAA 1997 204-30(3) ITAA 1997 204-30(3)(c) ITAA 1997 Div 207 ITAA 1997 Subdiv 207-D ITAA 1997 Subdiv 207-E ITAA 1997 Subdiv 207-F ITAA 1997 207-20 ITAA 1997 207-20(1) ITAA 1997 207-20(2) ITAA 1997 207-145 ITAA 1997 207-145(1) ITAA 1997 207-145(1)(a) ITAA 1997 207-145(1)(b) ITAA 1997 207-145(1)(c) ITAA 1997 207-145(1)(d) ITAA 1997 207-145(1)(da) ITAA 1997 207-155 ITAA 1997 207-157 ITAA 1997 207-157(4) ITAA 1997 Div 974 ITAA 1997 974-20(1)(d) ITAA 1997 974-70(1) ITAA 1997 974-75 ITAA 1997 974-75(1) ITAA 1997 974-115 ITAA 1997 974-115(b)(ii) ITAA 1997 974-120 ITAA 1997 974-120(1) ITAA 1997 974-120(2) ITAA 1997 974-130(1) ITAA 1997 995-1(1)
Other references: Explanatory Memorandum to the New Business Tax System (Imputation) Bill 2002