Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:17_4:p1
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 17 cl 4 (pt 1/4)
Character Range: 240247–243077

4  After section 215‑1
Insert:

Subdivision 215‑B—Non‑share dividends that are unfrankable to some extent

Guide to Subdivision 215‑B

215‑5  What this Subdivision is about

      While non‑share dividends are, as a general rule, frankable, all or part of some non‑share dividends are taken to be unfrankable by virtue of these rules.

Table of sections

215‑10 Certain non‑share dividends by ADIs unfrankable
215‑15 Non‑share dividends are unfrankable if profits are unavailable
215‑20 Working out the available frankable profits
215‑25 Anticipating available frankable profits

215‑10  Certain non‑share dividends by ADIs unfrankable

 (1) A *non‑share dividend paid by an ADI (an authorised deposit‑taking institution) for the purposes of the Banking Act 1959 is unfrankable if:
 (a) the ADI is an *Australian resident; and
 (b) the non‑share dividend is paid in respect of a *non‑share equity interest that:
 (i) by itself; or
 (ii) in combination with one or more schemes that are *related schemes to the scheme under which the interest arises;
  forms part of the ADI's Tier 1 capital either on a solo or consolidated basis (within the meaning of the prudential standards); and
 (c) the non‑share equity interest is issued at or through a permanent establishment of the ADI in a broad‑exemption listed country (within the meaning of Part X of the Income Tax Assessment Act 1936); and
 (d) the funds from the issue of the non‑share equity interest are raised and applied solely for one or more purposes permitted under subsection (2) in relation to the non‑share equity interest.

 (2) The permitted purposes in relation to the *non‑share equity interest (the relevant interest) are the following:
 (a) the purpose of the business of the ADI carried on at or through the permanent establishment other than the transfer of funds directly or indirectly to:
 (i) the Australian head office of the permanent establishment; or
 (ii) any connected entity of the ADI that is an *Australian resident; or
 (iii) a permanent establishment of the ADI, or of a connected entity of the ADI, located in Australia;
 (b) the purpose of redeeming:
 (i) a *debt interest; or
 (ii) a non‑share equity interest;
  that is issued, before the relevant interest is issued, at or through the permanent establishment and is held by a connected entity of the ADI that is an Australian resident;
 (c) the purpose of returning funds to:
 (i) the Australian head office of the permanent establishment; or
 (ii) a permanent establishment of the ADI or of a connected entity of the ADI, located in Australia;
  if the funds are contributed, before the relevant interest is issued, for use in the business of the ADI carried on at or through the permanent establishment.

215‑15  Non‑share dividends are unfrankable if profits are unavailable

 (1) If: