Class Ruling CR 2023/17

What this ruling is about: 1. This Ruling sets out the way in which specified income tax provisions apply to entities who subscribed for and acquired Australia and New Zealand Banking Group Limited Capital Notes 8 (ANZ Capital Notes 8) issued by Australia and New Zealand Banking Group Limited (ANZ). 2. Details of this scheme are set out in paragraphs 54 to 103 of this Ruling. 3. In this Ruling, unless otherwise defined, capitalised terms have the meaning specified in the Terms of ANZ Capital Notes 8 (the Note Terms) which are contained in Appendix A of the Prospectus for the issue of ANZ Capital Notes 8, dated 23 February 2023 (the Prospectus), or in the glossary contained in Appendix B of the Prospectus. 4. All legislative references in this Ruling are to the Income Tax Assessment Act 1997, unless otherwise indicated. Who this Ruling applies to 5. This Ruling applies to you if you are an investor (also referred to as a Holder) who: Note: Division 230 will not apply to individuals unless they have made an election for it to apply. What this Ruling does not consider 6. This Ruling does not deal with: When this Ruling applies 7. This Ruling applies from 1 July 2022 to 30 June 2033. Consequences of acquiring ANZ Capital Notes 8 Acquisition date 8. You acquired your ANZ Capital Notes 8 on 24 March 2023 under table item 2 of section 109-10. Cost base and reduced cost base of each ANZ Capital Note 8 9. The first element of the cost base and reduced cost base of each ANZ Capital Note 8 is A$100, being the money you paid to acquire your ANZ Capital Notes 8 (subsections 110-25(2) and 110-55(2)). Consequences of holding ANZ Capital Notes 8 Distributions on ANZ Capital Notes 8 and entitlement to a tax offset for franking credits 10. A Distribution on ANZ Capital Notes 8 is a non-share dividend under section 974-120 and is included in your assessable income (subparagraph 44(1)(a)(ii) of the ITAA 1936). 11. If you are a qualified person in relation to the Distribution in the income year in which the Distribution is made, you also: 12. To the extent that a Distribution (or a part of it) is either exempt income or non-assessable non-exempt income in your hands (and none of the exceptions in Subdivision 207-E apply), the amount of any franking credit on the Distribution that is exempt income or non-assessable non-exempt income is not included in your assessable income and you are not entitled to a tax offset under Division 207 (Subdivision 207-D). 13. The franking credit tax offset you are entitled to under Division 207 is subject to the refundable tax offset rules in Division 67, provided you are not excluded by the operation of section 67-25. Entities excluded by section 67-25 include:

Class of entities or scheme: 54. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Background: 55. ANZ Holdings is an Australian-resident company for income tax purposes and is listed on the Australian Securities Exchange (ASX). ANZ Holdings is the non-operating holding company of the ANZ Group and for Australian income tax purposes, is the head company of the ANZ Holdings income tax consolidated group. 56. ANZ is an Australian-resident company for income tax purposes. ANZ is a wholly-owned subsidiary of ANZ Holdings and for Australian income tax purposes is a member of the ANZ Holdings income tax consolidated group. 57. ANZ is an authorised deposit-taking institution for the purposes of the Banking Act 1959 and is regulated by Australian Prudential Regulation Authority (APRA). 58. ANZ is required by APRA to maintain mandatory levels of Tier 1 Capital. 59. Under the Prospectus, ANZ announced its intention to undertake a capital raising by the issue of ANZ Capital Notes 8 for an issue price of A$100 each to raise $1.5 billion, with the ability to raise more or less (the Offer). 60. The classes of applicants who could apply for ANZ Capital Notes 8 and the corresponding process for lodging applications were set out in the Prospectus. The classes of applicants were: 61. ANZ Capital Notes 8 were issued on 24 March 2023. 62. ANZ Capital Notes 8 are listed on the ASX under the ASX code AN3PK. 63. ANZ Capital Notes 8 were issued by ANZ in Australia. No action was taken to register or qualify ANZ Capital Notes 8 or the Offer, or to otherwise permit a public offering of ANZ Capital Notes 8, outside Australia. However, ANZ Capital Notes 8 were able to be offered in a jurisdiction outside Australia under the Institutional Offer, New Money Offer or Reinvestment Offer where such offer was made in accordance with the laws of that jurisdiction. 64. The Offer has been made as part of ANZ's ongoing capital management strategy within the regulatory capital requirements prescribed by APRA. The issue of ANZ Capital Notes 8 is a new capital raising. The proceeds from the issue of ANZ Capital Notes 8 are expected to replace funding previously provided by ANZ Capital Notes 3 issued in March 2015, maintain ANZ's Additional Tier 1 Capital ratios, and be used for general corporate purposes. | Main features of ANZ Capital Notes 8: 65. ANZ Capital Notes 8 are fully-paid, non-cumulative, convertible, transferable, redeemable, subordinated, perpetual unsecured notes issued by ANZ. 66. A Holder does not have voting rights under the ANZ Capital Notes 8 but can participate in Special Resolutions in the specific circumstances provided in the Note Terms. | Issue price: 67. The issue price (Face Value) of each ANZ Capital Note 8 is A$100. ANZ Capital Notes 8 were issued fully paid on the Issue Date, being 24 March 2023. | Distributions: 68. ANZ will pay cash Distributions in respect of each ANZ Capital Note 8 on a Distribution Payment Date in accordance with the Note Terms. 69. The Distribution payable is calculated on the Face Value of each ANZ Capital Note 8 using a Distribution Rate which is equal to the BBSW Rate [1] plus a Margin adjusted by the Tax Rate and based on the number of days in the Distribution Period divided by 365. The Margin was determined under the Bookbuild. 70. Distributions are expected to be franked at the same rate as dividends on ANZ Holdings Ordinary Shares. However, if any Distribution is not franked or only partially franked, the Distribution will be grossed-up to the extent that the franking percentage of the Distribution is less than 100%, as determined by the formula in clause 3.2 of the Note Terms. 71. The payment of a Distribution is subject to the absolute discretion of ANZ and can also only be paid if certain Payment Conditions are met including that the payment will not result in ANZ becoming or likely to become insolvent for the purposes of the Corporations Act 2001 and APRA not otherwise objecting to the payment of the Distribution. 72. A Distribution is only payable to those persons registered as a Holder on the Record Date for that Distribution. 73. As Distributions are non-cumulative, Holders will have no recourse in the event of non-payment arising because ANZ has determined not to pay a Distribution, a Payment Condition exists at the relevant Distribution Payment Date, or because of any applicable law. Non-payment of all, or part, of a Distribution does not constitute an event of default by ANZ and the Holders have no claim in respect of non-payment. 74. No interest accrues on any unpaid Distribution and the Holders have no claim or entitlement in respect of interest on any unpaid Distributions. 75. The Distribution Payment Dates are each 20 March, 20 June, 20 September and 20 December, commencing on 20 June 2023 until (but not including) the date on which Redemption or Conversion occurs (which are referred to specifically as Scheduled Distribution Payment Dates). Subject to the Note Terms, a Distribution Payment Date will also occur on each date on which a Conversion, Redemption or Resale occurs. 76. If a Distribution is not paid in full on a Distribution Payment Date (the Relevant Distribution Payment Date), ANZ must not (unless the Distribution is paid in full within 3 Business Days of the Relevant Distribution Payment Date) without approval of a Special Resolution of Holders, until and including the next Distribution Payment Date: 77. However, there is no restriction on ANZ Holdings resolving to pay or paying a dividend on, undertaking any buy-back of, or reducing capital in respect of, ANZ Holdings Ordinary Shares. | Conversion: 78. 'Conversion' means, in relation to an ANZ Capital Note 8, the allotment and issue of ANZ Holdings Ordinary Shares, and the termination of the Holder's rights in relation to that Note, in each case in accordance with clause 6 of the Note Terms. 79. On Conversion: 80. The Conversion Number (of ANZ Holdings Ordinary Shares for each ANZ Capital Note 8) is calculated according to the formula set out in clause 6.1 of the Note Terms and is always subject to the Conversion Number not being greater than the Maximum Conversion Number. 81. Each ANZ Holdings Ordinary Share issued upon Conversion ranks equally with all other fully-paid ANZ Holdings Ordinary Shares. | Mandatory Conversion: 82. Subject to the occurrence of a Trigger Event, ANZ must Convert all ANZ Capital Notes 8 on issue into ANZ Holdings Ordinary Shares on the Mandatory Conversion Date. 83. The Mandatory Conversion Date is the first to occur of 20 September 2032 (which is the Scheduled Mandatory Conversion Date) and the first Distribution Payment Date after 20 September 2032 (which is a Subsequent Mandatory Conversion Date) (each a Relevant Date) on which the Mandatory Conversion Conditions are satisfied. 84. The Mandatory Conversion Conditions for each Relevant Date are: | Mandatory Conversion on a Change of Control Event: 85. ANZ must Convert all (but not some only) ANZ Capital Notes 8 on the occurrence of a Change of Control Event. Conversion will not occur on a Change of Control Conversion Date if either the Second Mandatory Conversion Condition (as if it referred to 20.21% of the Issue Date VWAP) is not satisfied on, or a Delisting Event applies to, that date. | Trigger Event Conversion: 86. Conversion of the ANZ Capital Notes 8 may occur at a time before the Scheduled Mandatory Conversion Date on the occurrence of: 87. A Common Equity Capital Trigger Event occurs when ANZ determines, or APRA has notified ANZ in writing that it believes a Common Equity Capital Ratio is equal to, or less than, 5.125%. 88. A Non-Viability Trigger Event means the earlier of: 89. A Conversion following a Trigger Event will occur immediately and is not subject to any conditions. The number of ANZ Holdings Ordinary Shares that Holders receive on a Conversion will not be greater than the Maximum Conversion Number. If the ANZ Capital Notes 8 cannot be Converted within 5 Business Days after the relevant Trigger Event Conversion Date for any reason (including due to the occurrence of an Inability Event), they will be Written Off, which means all rights in relation to those Notes will be terminated, and those Holders will not have their capital repaid or have any right to any Distributions. | Optional Exchange: 90. ANZ may elect to Exchange at their discretion (Holders of ANZ Capital Notes 8 do not have a right to request an Exchange): 91. If ANZ elects to Exchange ANZ Capital Notes 8, it must, subject to APRA's prior written approval, elect which of the following (or which combination of the following) it intends to do in respect of ANZ Capital Notes 8 (the Exchange Method): 92. ANZ may not elect Conversion as the Exchange Method if the VWAP on the Non-Conversion Test Date is less than or equal to 22.5% of the Issue Date VWAP (the First Optional Conversion Restriction) or a Delisting Event applies in respect of the Non-Conversion Test Date (the Second Optional Conversion Restriction).The Non-Conversion Test Date is 2 Business Days prior to the date of the election where the ANZ Holdings Ordinary Shares were trading on such date, otherwise, one Business Day prior to the last day they were last trading. | Optional Redemption: 93. ANZ may elect to Redeem ANZ Capital Notes 8 in accordance with clause 7 of the Note Terms, so long as prior written approval is provided by APRA, and: 94. ANZ Capital Notes 8 will be Redeemed by payment to the Holder on the Exchange Date of the Face Value. 95. On the Exchange Date, the only right the Holders of ANZ Capital Notes 8 will have in respect of ANZ Capital Notes 8 will be to obtain the Face Value payable in accordance with the Note Terms and, upon the payment of the Face Value, all other rights conferred or restrictions imposed by ANZ Capital Notes 8 will no longer have effect. | Optional Resale: 96. ANZ may (subject to APRA giving its prior written approval) elect to Resell ANZ Capital Notes 8 in accordance with clause 8 of the Note Terms. 97. ANZ may appoint one or more Purchasers for the Resale on such terms as may be agreed between ANZ and the Purchaser, but ANZ may not appoint itself or any Related Entity as a Purchaser. 98. If ANZ specifies Resale as the Exchange Method, each Holder is taken irrevocably to offer to sell the relevant number of ANZ Capital Notes 8 to the Purchaser on the Exchange Date for a cash amount equal to the Face Value. Subject to payment by the Purchaser of the Face Value to the Holders, all rights, title and interest in such ANZ Capital Notes 8 will be transferred to the Purchaser on the Exchange Date. | Substitution of an Approved Successor: 99. Clause 11.1 of the Note Terms provides if an Approved Successor Event occurs, ANZ may appoint an Approved Successor, subject to the Approved Successor's agreement, to either: 100. The Approved Successor may be any of: 101. Approved NOHC means a NOHC arising as a result of an Approved NOHC Event. Approved NOHC Event means a NOHC Event in respect of which the proviso to the definition of 'Change of Control Event' is satisfied. A 'NOHC Event' means an event which is initiated by the ANZ Holdings Directors acting as a board and would otherwise be a Change of Control Event but the result of which would be that the ultimate holding company of ANZ would be a NOHC. 102. An Approved Successor Notice must be given no later than 10 Business Days before the Approved Successor Event occurs specifying the amendments to the Note Terms which will be made in accordance with clause 14.2 to effect the substitution. | Other matters: 103. This Ruling is made on the basis that: Commissioner of Taxation 12 April 2023

Ruling: 1. This Ruling sets out the way in which specified income tax provisions apply to entities who subscribed for and acquired Australia and New Zealand Banking Group Limited Capital Notes 8 (ANZ Capital Notes 8) issued by Australia and New Zealand Banking Group Limited (ANZ). 2. Details of this scheme are set out in paragraphs 54 to 103 of this Ruling. 3. In this Ruling, unless otherwise defined, capitalised terms have the meaning specified in the Terms of ANZ Capital Notes 8 (the Note Terms) which are contained in Appendix A of the Prospectus for the issue of ANZ Capital Notes 8, dated 23 February 2023 (the Prospectus), or in the glossary contained in Appendix B of the Prospectus. 4. All legislative references in this Ruling are to the Income Tax Assessment Act 1997, unless otherwise indicated. | Who this Ruling applies to: 5. This Ruling applies to you if you are an investor (also referred to as a Holder) who: Note: Division 230 will not apply to individuals unless they have made an election for it to apply. | What this Ruling does not consider: 6. This Ruling does not deal with: | When this Ruling applies: 7. This Ruling applies from 1 July 2022 to 30 June 2033. | Acquisition date: 8. You acquired your ANZ Capital Notes 8 on 24 March 2023 under table item 2 of section 109-10. | Cost base and reduced cost base of each ANZ Capital Note 8: 9. The first element of the cost base and reduced cost base of each ANZ Capital Note 8 is A$100, being the money you paid to acquire your ANZ Capital Notes 8 (subsections 110-25(2) and 110-55(2)). | Distributions on ANZ Capital Notes 8 and entitlement to a tax offset for franking credits: 10. A Distribution on ANZ Capital Notes 8 is a non-share dividend under section 974-120 and is included in your assessable income (subparagraph 44(1)(a)(ii) of the ITAA 1936). 11. If you are a qualified person in relation to the Distribution in the income year in which the Distribution is made, you also: 12. To the extent that a Distribution (or a part of it) is either exempt income or non-assessable non-exempt income in your hands (and none of the exceptions in Subdivision 207-E apply), the amount of any franking credit on the Distribution that is exempt income or non-assessable non-exempt income is not included in your assessable income and you are not entitled to a tax offset under Division 207 (Subdivision 207-D). 13. The franking credit tax offset you are entitled to under Division 207 is subject to the refundable tax offset rules in Division 67, provided you are not excluded by the operation of section 67-25. Entities excluded by section 67-25 include: | Determination under paragraph 204-30(3)(c): 14. The Commissioner will not make a determination under paragraph 204-30(3)(c) to deny the whole, or any part, of the imputation benefits you receive in relation to a Distribution. | Determination under paragraph 177EA(5)(b) of the ITAA 1936: 15. 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 you receive in relation to a Distribution. | Gross-up and tax offset cancelled in certain circumstances: 16. Paragraph 207-145(1)(a) will not apply to cancel the effect of the gross-up and tax offset in respect of a franked Distribution if you are a qualified person in respect of that Distribution. 17. As this Ruling is made on the basis that you will not take any 'positions' (as defined in former section 160APHJ of the ITAA 1936), make any 'related payments' (as defined in former section 160APHN of the ITAA 1936), and you will hold your ANZ Capital Notes 8 for at least 90 days during the 'primary qualification period' (as defined in former section 160APHD of the ITAA 1936) (refer to subparagraphs 103(p), (q) and (r) of this Ruling), you will be a qualified person in relation to a Distribution. 18. The Resale facility and Conversion mechanism of ANZ Capital Notes 8 will not affect your risks of loss or opportunities for gain in respect of your ANZ Capital Notes 8. This is because neither the Resale facility nor the Conversion mechanism constitutes a separate position (former section 160APHJ of the ITAA 1936). 19. Paragraphs 207-145(1)(b) to (db) will not apply to cancel the effect of the gross-up and tax offset rules in respect of a franked Distribution. 20. In respect of paragraphs 207-145(1)(b) and (c), refer to paragraphs 14 and 15 of this Ruling. 21. In respect of paragraph 207-145(1)(d), based on the facts of the scheme, there is no evidence that the Distributions will be made as part of a dividend stripping operation. 22. In respect of paragraph 207-145(1)(da), this Ruling is made on the basis that the distribution washing provision does not apply (refer to subparagraph 103(s) of this Ruling). 23. In respect of paragraph 207-145(1)(db), the ANZ Capital Notes 8 are equity interests which form part of ANZ's Additional Tier 1 Capital (refer to subsection 207-158(2) and subparagraph 103(c) of this Ruling). | ANZ Capital Notes 8 are not traditional securities: 24. An ANZ Capital Note 8 is not a 'traditional security' as defined in subsection 26BB(1) of the ITAA 1936. 25. Section 26BB of the ITAA 1936 will not apply to include any gain on the disposal or Redemption of an ANZ Capital Note 8 in your assessable income. 26. Section 70B of the ITAA 1936 will not apply to allow any loss on the disposal or Redemption of an ANZ Capital Note 8 as a deduction to you. | Conversion of ANZ Capital Notes 8 for ANZ Holdings Ordinary Shares: 27. Each ANZ Capital Note 8 is a convertible interest. 28. CGT event C2 happens on Conversion (section 104-25). 29. A capital gain or capital loss you make from CGT event C2 happening on Conversion will be disregarded (subsection 130-60(3)). 30. ANZ Holdings Ordinary Shares acquired on Conversion will be taken to have been acquired when the Conversion happens on the relevant Conversion Date (subsection 130-60(2)). 31. The first element of the cost base and reduced cost base of each ANZ Holdings Ordinary Share acquired on Conversion will be equal to the cost base and reduced cost base of the relevant ANZ Capital Notes 8 at the time of Conversion divided by the number of ANZ Holdings Ordinary Shares you receive (table item 2 of subsection 130-60(1)). 32. As you hold your ANZ Capital Notes 8 on capital account, no amount will be included in your assessable income on the Conversion of an ANZ Capital Note 8 under section 6-5. 33. You will not incur a deductible loss under section 8-1 as a consequence of Conversion. 34. On the Conversion of ANZ Capital Notes 8 for ANZ Holdings Ordinary Shares, you will not be taken to have received a dividend or a non-share dividend. | Amendment of the Note Terms to substitute an Approved Successor as the issuer of the ordinary shares: 35. CGT event H2 happens if the Note Terms are amended to effect the substitution of an Approved Successor as the issuer of ordinary shares to you on Conversion (section 104-155). 36. However, you do not make a capital gain or a capital loss from CGT event H2 happening as there are no capital proceeds or incidental costs incurred because of the amendment of the Note Terms. | Conversion of each ANZ Capital Note 8 and the issue of ordinary shares in an Approved Successor - capital gains tax implications: 37. Where an Approved Successor has assumed ANZ Holdings' obligation to issue ordinary shares upon Conversion, the Conversion of ANZ Capital Notes 8 and the issue of Approved Successor Ordinary Shares to you results in CGT event C2 happening as it is the conversion of a convertible interest (section 104-25). 38. As the Approved Successor Ordinary Shares are equity interests within the meaning of Division 974, any capital gain or capital loss that you make from CGT event C2 happening when the ANZ Capital Notes 8 are Converted to ordinary shares in an Approved Successor is disregarded (section 130-60(3)). 39. The first element of the cost base and the reduced cost base of each Approved Successor Ordinary Share issued to you is calculated as the cost base of your ANZ Capital Notes 8 at the time of Conversion divided by the number of Approved Successor Ordinary Shares you receive (table item 2 of subsection 130-60(1)). 40. You are taken to have acquired your Approved Successor Ordinary Shares at the time of Conversion (subsection 130-60(2)). | Redemption of ANZ Capital Notes 8: 41. CGT event C2 happens when an ANZ Capital Note 8 is Redeemed because the ANZ Capital Note 8 is terminated at that time (section 104-25). 42. The capital proceeds received by Holders on Redemption of the ANZ Capital Notes 8 will be replaced with the market value of the ANZ Capital Notes 8 on the date of Redemption, worked out as if the Redemption had not occurred and was never proposed to occur, if the capital proceeds are more or less than the market value of the ANZ Capital Notes 8 (subparagraph 116-30(2)(b)(ii)). 43. You will make a capital gain (or capital loss) on Redemption of your ANZ Capital Notes 8 if the capital proceeds you receive are greater than (or less than) the cost base of your ANZ Capital Notes 8. 44. As you hold your ANZ Capital Notes 8 on capital account, no amount will be included in your assessable income on Redemption under section 6-5. You will not incur a deductible loss under section 8-1 as a consequence of the Redemption. | ANZ Capital Notes 8 that are Written Off: 45. CGT event C2 happens when an ANZ Capital Note 8 is Written Off because the ANZ Capital Note 8 is terminated at that time (section 104-25). 46. For the purposes of determining whether you make a capital gain or a capital loss from CGT event C2 happening in respect of your ANZ Capital Notes 8, you are taken to have nil capital proceeds from CGT event C2 happening. This is because you receive no capital proceeds in respect of a Write Off happening, and your ANZ Capital Notes 8 have a market value of nil at that time. | Resale of ANZ Capital Notes 8: 47. CGT event A1 in section 104-10 happens on the Resale of an ANZ Capital Note 8. The Resale of an ANZ Capital Note 8 to the Purchaser will be for the Face Value of the ANZ Capital Note 8. 48. As the capital proceeds you receive will not be more than the cost base of the ANZ Capital Notes 8, you will not make a capital gain as a result of the Resale. 49. As you hold your ANZ Capital Notes 8 on capital account, no amount will be included in your assessable income on the Resale under section 6-5. 50. You will not incur a deductible loss under section 8-1 as a consequence of the Resale. | Section 45 of the ITAA 1936: 51. Section 45 of the ITAA 1936 will not apply to treat the value of ANZ Holdings Ordinary Shares or Approved Successor Ordinary Shares issued to you on Conversion as an unfrankable dividend. | Section 45A of the ITAA 1936: 52. 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 a part of, the capital benefit provided to you on Conversion or Redemption as an unfranked dividend. | Section 45B of the ITAA 1936: 53. 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 a part of, the capital benefit provided to you on Conversion or Redemption as an unfranked dividend. 54. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Background: 55. ANZ Holdings is an Australian-resident company for income tax purposes and is listed on the Australian Securities Exchange (ASX). ANZ Holdings is the non-operating holding company of the ANZ Group and for Australian income tax purposes, is the head company of the ANZ Holdings income tax consolidated group. 56. ANZ is an Australian-resident company for income tax purposes. ANZ is a wholly-owned subsidiary of ANZ Holdings and for Australian income tax purposes is a member of the ANZ Holdings income tax consolidated group. 57. ANZ is an authorised deposit-taking institution for the purposes of the Banking Act 1959 and is regulated by Australian Prudential Regulation Authority (APRA). 58. ANZ is required by APRA to maintain mandatory levels of Tier 1 Capital. 59. Under the Prospectus, ANZ announced its intention to undertake a capital raising by the issue of ANZ Capital Notes 8 for an issue price of A$100 each to raise $1.5 billion, with the ability to raise more or less (the Offer). 60. The classes of applicants who could apply for ANZ Capital Notes 8 and the corresponding process for lodging applications were set out in the Prospectus. The classes of applicants were: 61. ANZ Capital Notes 8 were issued on 24 March 2023. 62. ANZ Capital Notes 8 are listed on the ASX under the ASX code AN3PK. 63. ANZ Capital Notes 8 were issued by ANZ in Australia. No action was taken to register or qualify ANZ Capital Notes 8 or the Offer, or to otherwise permit a public offering of ANZ Capital Notes 8, outside Australia. However, ANZ Capital Notes 8 were able to be offered in a jurisdiction outside Australia under the Institutional Offer, New Money Offer or Reinvestment Offer where such offer was made in accordance with the laws of that jurisdiction. 64. The Offer has been made as part of ANZ's ongoing capital management strategy within the regulatory capital requirements prescribed by APRA. The issue of ANZ Capital Notes 8 is a new capital raising. The proceeds from the issue of ANZ Capital Notes 8 are expected to replace funding previously provided by ANZ Capital Notes 3 issued in March 2015, maintain ANZ's Additional Tier 1 Capital ratios, and be used for general corporate purposes. | Main features of ANZ Capital Notes 8: 65. ANZ Capital Notes 8 are fully-paid, non-cumulative, convertible, transferable, redeemable, subordinated, perpetual unsecured notes issued by ANZ. 66. A Holder does not have voting rights under the ANZ Capital Notes 8 but can participate in Special Resolutions in the specific circumstances provided in the Note Terms. | Issue price: 67. The issue price (Face Value) of each ANZ Capital Note 8 is A$100. ANZ Capital Notes 8 were issued fully paid on the Issue Date, being 24 March 2023. | Distributions: 68. ANZ will pay cash Distributions in respect of each ANZ Capital Note 8 on a Distribution Payment Date in accordance with the Note Terms. 69. The Distribution payable is calculated on the Face Value of each ANZ Capital Note 8 using a Distribution Rate which is equal to the BBSW Rate [1] plus a Margin adjusted by the Tax Rate and based on the number of days in the Distribution Period divided by 365. The Margin was determined under the Bookbuild. 70. Distributions are expected to be franked at the same rate as dividends on ANZ Holdings Ordinary Shares. However, if any Distribution is not franked or only partially franked, the Distribution will be grossed-up to the extent that the franking percentage of the Distribution is less than 100%, as determined by the formula in clause 3.2 of the Note Terms. 71. The payment of a Distribution is subject to the absolute discretion of ANZ and can also only be paid if certain Payment Conditions are met including that the payment will not result in ANZ becoming or likely to become insolvent for the purposes of the Corporations Act 2001 and APRA not otherwise objecting to the payment of the Distribution. 72. A Distribution is only payable to those persons registered as a Holder on the Record Date for that Distribution. 73. As Distributions are non-cumulative, Holders will have no recourse in the event of non-payment arising because ANZ has determined not to pay a Distribution, a Payment Condition exists at the relevant Distribution Payment Date, or because of any applicable law. Non-payment of all, or part, of a Distribution does not constitute an event of default by ANZ and the Holders have no claim in respect of non-payment. 74. No interest accrues on any unpaid Distribution and the Holders have no claim or entitlement in respect of interest on any unpaid Distributions. 75. The Distribution Payment Dates are each 20 March, 20 June, 20 September and 20 December, commencing on 20 June 2023 until (but not including) the date on which Redemption or Conversion occurs (which are referred to specifically as Scheduled Distribution Payment Dates). Subject to the Note Terms, a Distribution Payment Date will also occur on each date on which a Conversion, Redemption or Resale occurs. 76. If a Distribution is not paid in full on a Distribution Payment Date (the Relevant Distribution Payment Date), ANZ must not (unless the Distribution is paid in full within 3 Business Days of the Relevant Distribution Payment Date) without approval of a Special Resolution of Holders, until and including the next Distribution Payment Date: 77. However, there is no restriction on ANZ Holdings resolving to pay or paying a dividend on, undertaking any buy-back of, or reducing capital in respect of, ANZ Holdings Ordinary Shares. | Conversion: 78. 'Conversion' means, in relation to an ANZ Capital Note 8, the allotment and issue of ANZ Holdings Ordinary Shares, and the termination of the Holder's rights in relation to that Note, in each case in accordance with clause 6 of the Note Terms. 79. On Conversion: 80. The Conversion Number (of ANZ Holdings Ordinary Shares for each ANZ Capital Note 8) is calculated according to the formula set out in clause 6.1 of the Note Terms and is always subject to the Conversion Number not being greater than the Maximum Conversion Number. 81. Each ANZ Holdings Ordinary Share issued upon Conversion ranks equally with all other fully-paid ANZ Holdings Ordinary Shares. | Mandatory Conversion: 82. Subject to the occurrence of a Trigger Event, ANZ must Convert all ANZ Capital Notes 8 on issue into ANZ Holdings Ordinary Shares on the Mandatory Conversion Date. 83. The Mandatory Conversion Date is the first to occur of 20 September 2032 (which is the Scheduled Mandatory Conversion Date) and the first Distribution Payment Date after 20 September 2032 (which is a Subsequent Mandatory Conversion Date) (each a Relevant Date) on which the Mandatory Conversion Conditions are satisfied. 84. The Mandatory Conversion Conditions for each Relevant Date are: | Mandatory Conversion on a Change of Control Event: 85. ANZ must Convert all (but not some only) ANZ Capital Notes 8 on the occurrence of a Change of Control Event. Conversion will not occur on a Change of Control Conversion Date if either the Second Mandatory Conversion Condition (as if it referred to 20.21% of the Issue Date VWAP) is not satisfied on, or a Delisting Event applies to, that date. | Trigger Event Conversion: 86. Conversion of the ANZ Capital Notes 8 may occur at a time before the Scheduled Mandatory Conversion Date on the occurrence of: 87. A Common Equity Capital Trigger Event occurs when ANZ determines, or APRA has notified ANZ in writing that it believes a Common Equity Capital Ratio is equal to, or less than, 5.125%. 88. A Non-Viability Trigger Event means the earlier of: 89. A Conversion following a Trigger Event will occur immediately and is not subject to any conditions. The number of ANZ Holdings Ordinary Shares that Holders receive on a Conversion will not be greater than the Maximum Conversion Number. If the ANZ Capital Notes 8 cannot be Converted within 5 Business Days after the relevant Trigger Event Conversion Date for any reason (including due to the occurrence of an Inability Event), they will be Written Off, which means all rights in relation to those Notes will be terminated, and those Holders will not have their capital repaid or have any right to any Distributions. | Optional Exchange: 90. ANZ may elect to Exchange at their discretion (Holders of ANZ Capital Notes 8 do not have a right to request an Exchange): 91. If ANZ elects to Exchange ANZ Capital Notes 8, it must, subject to APRA's prior written approval, elect which of the following (or which combination of the following) it intends to do in respect of ANZ Capital Notes 8 (the Exchange Method): 92. ANZ may not elect Conversion as the Exchange Method if the VWAP on the Non-Conversion Test Date is less than or equal to 22.5% of the Issue Date VWAP (the First Optional Conversion Restriction) or a Delisting Event applies in respect of the Non-Conversion Test Date (the Second Optional Conversion Restriction).The Non-Conversion Test Date is 2 Business Days prior to the date of the election where the ANZ Holdings Ordinary Shares were trading on such date, otherwise, one Business Day prior to the last day they were last trading. | Optional Redemption: 93. ANZ may elect to Redeem ANZ Capital Notes 8 in accordance with clause 7 of the Note Terms, so long as prior written approval is provided by APRA, and: 94. ANZ Capital Notes 8 will be Redeemed by payment to the Holder on the Exchange Date of the Face Value. 95. On the Exchange Date, the only right the Holders of ANZ Capital Notes 8 will have in respect of ANZ Capital Notes 8 will be to obtain the Face Value payable in accordance with the Note Terms and, upon the payment of the Face Value, all other rights conferred or restrictions imposed by ANZ Capital Notes 8 will no longer have effect. | Optional Resale: 96. ANZ may (subject to APRA giving its prior written approval) elect to Resell ANZ Capital Notes 8 in accordance with clause 8 of the Note Terms. 97. ANZ may appoint one or more Purchasers for the Resale on such terms as may be agreed between ANZ and the Purchaser, but ANZ may not appoint itself or any Related Entity as a Purchaser. 98. If ANZ specifies Resale as the Exchange Method, each Holder is taken irrevocably to offer to sell the relevant number of ANZ Capital Notes 8 to the Purchaser on the Exchange Date for a cash amount equal to the Face Value. Subject to payment by the Purchaser of the Face Value to the Holders, all rights, title and interest in such ANZ Capital Notes 8 will be transferred to the Purchaser on the Exchange Date. | Substitution of an Approved Successor: 99. Clause 11.1 of the Note Terms provides if an Approved Successor Event occurs, ANZ may appoint an Approved Successor, subject to the Approved Successor's agreement, to either: 100. The Approved Successor may be any of: 101. Approved NOHC means a NOHC arising as a result of an Approved NOHC Event. Approved NOHC Event means a NOHC Event in respect of which the proviso to the definition of 'Change of Control Event' is satisfied. A 'NOHC Event' means an event which is initiated by the ANZ Holdings Directors acting as a board and would otherwise be a Change of Control Event but the result of which would be that the ultimate holding company of ANZ would be a NOHC. 102. An Approved Successor Notice must be given no later than 10 Business Days before the Approved Successor Event occurs specifying the amendments to the Note Terms which will be made in accordance with clause 14.2 to effect the substitution. | Other matters: 103. This Ruling is made on the basis that: Commissioner of Taxation 12 April 2023 | Determination under paragraph 204-30(3)(c): 104. Subsection 204-30(1) empowers the Commissioner to make a determination under paragraph 204-30(3)(c) if an entity streams distributions in a certain way. 105. Based on the scheme, there is no evidence of ANZ streaming distributions as Distributions will be received by all Holders in proportion to and by reason of their holding of ANZ Capital Notes 8 and not by reference to their tax profile or individual tax positions. There is nothing in the Note Terms that allows ANZ to treat Holders differently in respect of their entitlement to a franked Distribution. | Determination under paragraph 177EA(5)(b) of the ITAA 1936: 106. 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 a particular scheme is to enable a taxpayer to obtain an imputation benefit. 107. The conditions in paragraphs 177EA(3)(a) to (d) of the ITAA 1936 are satisfied, therefore the relevant circumstances of the scheme must be considered to establish whether any person who entered into or carried out the scheme, or any part of the scheme, did so for a more than incidental purpose of enabling a Holder to obtain an imputation benefit (paragraph 177EA(3)(e) of the ITAA 1936). 108. The Commissioner considers that the relevant circumstances of the scheme do not, on balance, lead to a conclusion that the purpose of enabling the Holders to obtain imputation benefits is more than incidental to ANZ's primary purpose of raising Additional Tier 1 Capital for regulatory capital requirements. | Gross-up and tax offset cancelled in certain circumstances: 109. If you are not a qualified person in relation to a Distribution, you: 110. As this Ruling is made on the basis that you will not make a related payment in respect of any Distribution, the relevant qualification period is the primary qualification period (as defined in former section 160APHD of the ITAA 1936). The primary qualification period for a Distribution begins on the day after you acquire your ANZ Capital Notes 8 and ends on the 90th day after the day ANZ Capital Notes 8 become ex-distribution in relation to that Distribution. 111. To be a qualified person in relation to a Distribution, you generally need to have held ANZ Capital Notes 8 'at risk' for a continuous period of 90 days (excluding the days of acquisition and disposal, if relevant) during the primary qualification period for that Distribution. Any days you had materially diminished risks of loss or opportunities for gain in respect of your holding are also excluded (former subsection 160APHO(3) of the ITAA 1936). Under former subsection 160APHM(2) of the ITAA 1936, you are taken to have materially diminished the risks of loss and opportunities for gain on a particular day with respect to your ANZ Capital Notes 8 if your net position on that day does not retain 30% or more of the risks and opportunities associated with holding ANZ Capital Notes 8 (for example, by taking a 'position' such as limited recourse loans, options or other derivatives). 112. Embedded options such as the Resale and Conversion mechanisms do not represent separate positions in relation to ANZ Capital Notes 8 (see also Taxation Determination TD 2007/29 Income tax: holding period rule: is an embedded share option a position in relation to the share if it is exercisable by or against a party other than the issuer of the share?). Under the Resale mechanism, you will only be taken to have made an offer to sell ANZ Capital Notes 8 if ANZ issues a Resale Notice. As ANZ is the only party entitled to make an election to exercise the Resale option, it is not a separate position that you have taken in relation to your ANZ Capital Notes 8. Similarly, under the Conversion mechanism you do not have the right to elect Conversion of your ANZ Capital Notes 8 and neither does ANZ have an obligation to Convert. Therefore, the Resale and Conversion mechanisms will not, of themselves, affect your risks of loss or opportunities for gain in respect of your ANZ Capital Notes 8. | Market value of ANZ Capital Notes 8 on Redemption: 113. The capital proceeds received by Holders on Redemption will be replaced with the market value of the ANZ Capital Notes 8 on the date of Redemption, worked out as if the Redemption had not occurred and was never proposed to occur, if the capital proceeds are more or less than the market value (subparagraph 116-30(2)(b)(ii)). 114. If the ANZ Capital Notes 8 are Redeemed on an Optional Exchange Date before the Mandatory Conversion Date, the market value of the ANZ Capital Notes 8 which are Redeemed will need to be determined in accordance with Practical Compliance Guideline PCG 2021/1 Application of market value substitution rules when there is a buy-back or redemption of hybrid securities - methodologies for determining market value for investors holding their securities on capital account. | Section 45 of the ITAA 1936: 115. 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: 116. ANZ's and ANZ Holdings' distribution and dividend payout ratios in relation to their Ordinary Shares and other equity interests are not expected to change as a result of issuing ANZ Capital Notes 8. The extent to which ANZ's and ANZ Holdings' distributions/dividends will be franked (including Distributions on ANZ Capital Notes 8) will depend on a number of factors, including the ANZ Group's capital management plan and the level of profits generated by the ANZ Group that will be subject to tax in Australia. 117. Under the Note Terms, ANZ and ANZ Holdings are unable to issue ANZ Holdings Ordinary Shares or ANZ Ordinary Shares to all or some Holders in satisfaction of their Distribution entitlement under ANZ Capital Notes 8. The issue of ANZ Holdings Ordinary Shares on Conversion merely reflects a change in the type of equity interests held by Holders. 118. 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 issue of ANZ Holdings Ordinary Shares to you on Conversion as an unfrankable dividend. | Section 45A of the ITAA 1936: 119. Section 45A of the ITAA 1936 applies where a company streams capital benefits and the payment of dividends to shareholders who derive a greater benefit from receiving the capital benefits (the advantaged shareholders), and it is reasonable to assume that the other shareholders have received, or will receive, dividends (the disadvantaged shareholders). 120. Both the issue of ANZ Holdings Ordinary Shares on Conversion and the Redemption of ANZ Capital Notes 8 will constitute the provision of a capital benefit to Holders (paragraph 45A(3)(a) of the ITAA 1936 for a Conversion, and paragraph 45A(3)(b) of the ITAA 1936 as affected by subsection 45A(3A) of the ITAA 1936 for a Redemption). 121. However, the issue of ANZ Holdings Ordinary Shares on Conversion and the Redemption of ANZ Capital Notes 8 will not constitute the streaming of capital benefits because under a Conversion or Redemption, ANZ or ANZ Holdings will not selectively direct the flow of capital benefits to Holders who could most benefit from the receipt of capital. Accordingly, as this requirement does not apply to the Conversion or Redemption of ANZ Capital Notes 8, the Commissioner will not make a determination to treat the whole or a part of the capital benefit received by Holders as an unfranked dividend. | Section 45B of the ITAA 1936: 122. Section 45B of the ITAA 1936 applies where certain capital benefits are provided to shareholders in substitution for dividends. Where the conditions are met, the Commissioner may make a determination under paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies to the whole, or a part, of the capital benefit such that it will be treated as an unfranked dividend. 123. The issue of ANZ Holdings Ordinary Shares to Holders on Conversion and the Redemption of ANZ Capital Notes 8 will each constitute a scheme under which the Holders are provided with a capital benefit by ANZ Holdings (paragraphs 45B(5)(a) and (b) and subsection 45B(7) of the ITAA 1936). Therefore, paragraph 45B(2)(a) of the ITAA 1936 will be satisfied. 124. At least some Holders will obtain a tax benefit as defined in subsection 45B(9) of the ITAA 1936 as a result of a Conversion or Redemption. Accordingly, paragraph 45B(2)(b) of the ITAA 1936 will be satisfied. 125. Therefore, whether section 45B of the ITAA 1936 will apply to a Conversion or Redemption turns on whether paragraph 45B(2)(c) of the ITAA 1936 will be satisfied. This involves considering the relevant circumstances, including but not limited to those listed in subsection 45B(8) of the ITAA 1936, of the Conversion and Redemption schemes to establish whether one of the persons who enter into or carry out the schemes do so for a more than incidental purpose of enabling a relevant taxpayer (the Holder) to obtain a tax benefit. 126. Having regard to the relevant circumstances it could not be concluded that the Conversion or Redemption of ANZ Capital Notes 8 will be entered into for a more than incidental purpose of enabling Holders to obtain a tax benefit. Accordingly, paragraph 45B(2)(c) of the ITAA 1936 would not be satisfied and 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 the whole or a part of the capital benefit provided to Holders on Conversion or Redemption. © 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).


Appendix: Determination under paragraph 204-30(3)(c): 104. Subsection 204-30(1) empowers the Commissioner to make a determination under paragraph 204-30(3)(c) if an entity streams distributions in a certain way. 105. Based on the scheme, there is no evidence of ANZ streaming distributions as Distributions will be received by all Holders in proportion to and by reason of their holding of ANZ Capital Notes 8 and not by reference to their tax profile or individual tax positions. There is nothing in the Note Terms that allows ANZ to treat Holders differently in respect of their entitlement to a franked Distribution. | Determination under paragraph 177EA(5)(b) of the ITAA 1936: 106. 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 a particular scheme is to enable a taxpayer to obtain an imputation benefit. 107. The conditions in paragraphs 177EA(3)(a) to (d) of the ITAA 1936 are satisfied, therefore the relevant circumstances of the scheme must be considered to establish whether any person who entered into or carried out the scheme, or any part of the scheme, did so for a more than incidental purpose of enabling a Holder to obtain an imputation benefit (paragraph 177EA(3)(e) of the ITAA 1936). 108. The Commissioner considers that the relevant circumstances of the scheme do not, on balance, lead to a conclusion that the purpose of enabling the Holders to obtain imputation benefits is more than incidental to ANZ's primary purpose of raising Additional Tier 1 Capital for regulatory capital requirements. | Gross-up and tax offset cancelled in certain circumstances: 109. If you are not a qualified person in relation to a Distribution, you: 110. As this Ruling is made on the basis that you will not make a related payment in respect of any Distribution, the relevant qualification period is the primary qualification period (as defined in former section 160APHD of the ITAA 1936). The primary qualification period for a Distribution begins on the day after you acquire your ANZ Capital Notes 8 and ends on the 90th day after the day ANZ Capital Notes 8 become ex-distribution in relation to that Distribution. 111. To be a qualified person in relation to a Distribution, you generally need to have held ANZ Capital Notes 8 'at risk' for a continuous period of 90 days (excluding the days of acquisition and disposal, if relevant) during the primary qualification period for that Distribution. Any days you had materially diminished risks of loss or opportunities for gain in respect of your holding are also excluded (former subsection 160APHO(3) of the ITAA 1936). Under former subsection 160APHM(2) of the ITAA 1936, you are taken to have materially diminished the risks of loss and opportunities for gain on a particular day with respect to your ANZ Capital Notes 8 if your net position on that day does not retain 30% or more of the risks and opportunities associated with holding ANZ Capital Notes 8 (for example, by taking a 'position' such as limited recourse loans, options or other derivatives). 112. Embedded options such as the Resale and Conversion mechanisms do not represent separate positions in relation to ANZ Capital Notes 8 (see also Taxation Determination TD 2007/29 Income tax: holding period rule: is an embedded share option a position in relation to the share if it is exercisable by or against a party other than the issuer of the share?). Under the Resale mechanism, you will only be taken to have made an offer to sell ANZ Capital Notes 8 if ANZ issues a Resale Notice. As ANZ is the only party entitled to make an election to exercise the Resale option, it is not a separate position that you have taken in relation to your ANZ Capital Notes 8. Similarly, under the Conversion mechanism you do not have the right to elect Conversion of your ANZ Capital Notes 8 and neither does ANZ have an obligation to Convert. Therefore, the Resale and Conversion mechanisms will not, of themselves, affect your risks of loss or opportunities for gain in respect of your ANZ Capital Notes 8. | Market value of ANZ Capital Notes 8 on Redemption: 113. The capital proceeds received by Holders on Redemption will be replaced with the market value of the ANZ Capital Notes 8 on the date of Redemption, worked out as if the Redemption had not occurred and was never proposed to occur, if the capital proceeds are more or less than the market value (subparagraph 116-30(2)(b)(ii)). 114. If the ANZ Capital Notes 8 are Redeemed on an Optional Exchange Date before the Mandatory Conversion Date, the market value of the ANZ Capital Notes 8 which are Redeemed will need to be determined in accordance with Practical Compliance Guideline PCG 2021/1 Application of market value substitution rules when there is a buy-back or redemption of hybrid securities - methodologies for determining market value for investors holding their securities on capital account. | Section 45 of the ITAA 1936: 115. 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: 116. ANZ's and ANZ Holdings' distribution and dividend payout ratios in relation to their Ordinary Shares and other equity interests are not expected to change as a result of issuing ANZ Capital Notes 8. The extent to which ANZ's and ANZ Holdings' distributions/dividends will be franked (including Distributions on ANZ Capital Notes 8) will depend on a number of factors, including the ANZ Group's capital management plan and the level of profits generated by the ANZ Group that will be subject to tax in Australia. 117. Under the Note Terms, ANZ and ANZ Holdings are unable to issue ANZ Holdings Ordinary Shares or ANZ Ordinary Shares to all or some Holders in satisfaction of their Distribution entitlement under ANZ Capital Notes 8. The issue of ANZ Holdings Ordinary Shares on Conversion merely reflects a change in the type of equity interests held by Holders. 118. 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 issue of ANZ Holdings Ordinary Shares to you on Conversion as an unfrankable dividend. | Section 45A of the ITAA 1936: 119. Section 45A of the ITAA 1936 applies where a company streams capital benefits and the payment of dividends to shareholders who derive a greater benefit from receiving the capital benefits (the advantaged shareholders), and it is reasonable to assume that the other shareholders have received, or will receive, dividends (the disadvantaged shareholders). 120. Both the issue of ANZ Holdings Ordinary Shares on Conversion and the Redemption of ANZ Capital Notes 8 will constitute the provision of a capital benefit to Holders (paragraph 45A(3)(a) of the ITAA 1936 for a Conversion, and paragraph 45A(3)(b) of the ITAA 1936 as affected by subsection 45A(3A) of the ITAA 1936 for a Redemption). 121. However, the issue of ANZ Holdings Ordinary Shares on Conversion and the Redemption of ANZ Capital Notes 8 will not constitute the streaming of capital benefits because under a Conversion or Redemption, ANZ or ANZ Holdings will not selectively direct the flow of capital benefits to Holders who could most benefit from the receipt of capital. Accordingly, as this requirement does not apply to the Conversion or Redemption of ANZ Capital Notes 8, the Commissioner will not make a determination to treat the whole or a part of the capital benefit received by Holders as an unfranked dividend. | Section 45B of the ITAA 1936: 122. Section 45B of the ITAA 1936 applies where certain capital benefits are provided to shareholders in substitution for dividends. Where the conditions are met, the Commissioner may make a determination under paragraph 45B(3)(b) of the ITAA 1936 that section 45C of the ITAA 1936 applies to the whole, or a part, of the capital benefit such that it will be treated as an unfranked dividend. 123. The issue of ANZ Holdings Ordinary Shares to Holders on Conversion and the Redemption of ANZ Capital Notes 8 will each constitute a scheme under which the Holders are provided with a capital benefit by ANZ Holdings (paragraphs 45B(5)(a) and (b) and subsection 45B(7) of the ITAA 1936). Therefore, paragraph 45B(2)(a) of the ITAA 1936 will be satisfied. 124. At least some Holders will obtain a tax benefit as defined in subsection 45B(9) of the ITAA 1936 as a result of a Conversion or Redemption. Accordingly, paragraph 45B(2)(b) of the ITAA 1936 will be satisfied. 125. Therefore, whether section 45B of the ITAA 1936 will apply to a Conversion or Redemption turns on whether paragraph 45B(2)(c) of the ITAA 1936 will be satisfied. This involves considering the relevant circumstances, including but not limited to those listed in subsection 45B(8) of the ITAA 1936, of the Conversion and Redemption schemes to establish whether one of the persons who enter into or carry out the schemes do so for a more than incidental purpose of enabling a relevant taxpayer (the Holder) to obtain a tax benefit. 126. Having regard to the relevant circumstances it could not be concluded that the Conversion or Redemption of ANZ Capital Notes 8 will be entered into for a more than incidental purpose of enabling Holders to obtain a tax benefit. Accordingly, paragraph 45B(2)(c) of the ITAA 1936 would not be satisfied and 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 the whole or a part of the capital benefit provided to Holders on Conversion or Redemption. © 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).


What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.


Related rulings: TD 2007/29
Legislative references: ITAA 1936 6(1) ITAA 1936 26BB ITAA 1936 26BB(1) 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)(a) ITAA 1936 45B(2)(b) 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 45B(9) ITAA 1936 45C ITAA 1936 70B ITAA 1936 98 ITAA 1936 99A ITAA 1936 former160APHD ITAA 1936 former160APHJ ITAA 1936 former160APHM ITAA 1936 former 160APHM(2) ITAA 1936 former 160APHN ITAA 1936 former 160APHO(3) ITAA 1936 177EA 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)(b) ITAA 1997 6-5 ITAA 1997 8-1 ITAA 1997 Div 67 ITAA 1997 67-25 ITAA 1997 67-25(1A) ITAA 1997 67-25(1B) ITAA 1997 67-25(1C) ITAA 1997 67-25(1D) ITAA 1997 104-10 ITAA 1997 104-25 ITAA 1997 104-155 ITAA 1997 109-10 ITAA 1997 110-25(2) ITAA 1997 110-55(2) ITAA 1997 116-30(2)(b)(ii) ITAA 1997 130-60(1) ITAA 1997 130-60(2) ITAA 1997 130-60(3) ITAA 1997 Subdiv 197-A ITAA 1997 202-40 ITAA 1997 204-30(1) ITAA 1997 204-30(3)(c) ITAA 1997 Div 207 ITAA 1997 207-20(1) ITAA 1997 207-20(2) ITAA 1997 Subdiv 207-D ITAA 1997 Subdiv 207-E 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 207-145(1)(db) ITAA 1997 207-145(1)(e) ITAA 1997 207-145(1)(f) ITAA 1997 207-157 ITAA 1997 207-157(4) ITAA 1997 207-158(2) ITAA 1997 215-20 ITAA 1997 Div 230 ITAA 1997 Div 974 ITAA 1997 974-115 ITAA 9997 974-120 ITAA 1997 977-50 ITAA 1997 995-1(1) Banking Act 1959 11AF Corporations Act 2001 716G
Other references: PCG 2021/1