Document ID: chunk:federal_register_of_legislation:C2025C00014:section:128fa:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 128FA (pt 1/4)
Character Range: 1283079–1285712

128FA  Division does not apply to interest on certain publicly offered unit trust debentures or debt interests

Interest to which this section applies
 (1) This section applies to interest paid by the trustee of an eligible unit trust in respect of a debenture or debt interest issued by the trustee if:
 (a) for a debt interest other than a debenture—the debt interest:
 (i) is a syndicated loan; or
 (ii) is prescribed by the regulations for the purposes of this section; and
 (b) either:
 (i) the issue of the debenture or debt interest satisfies the public offer test set (see subsection (6)); or
 (ii) for a syndicated loan—the invitation to become a lender under the relevant syndicated loan facility satisfies the public offer test (see subsection (6A)).
 (2) If:
 (a) some or all of the transfer price (within the meaning of section 128AA) of a debenture or debt interest issued by the trustee of an eligible unit trust is taken under that section to be income that consists of interest; and
 (b) for a debt interest other than a debenture—the debt interest:
 (i) is a syndicated loan; or
 (ii) is prescribed by the regulations for the purposes of this section; and
 (c) either:
 (i) the issue of the debenture or debt interest satisfies the public offer test set (see subsection (6)); or
 (ii) for a syndicated loan—the invitation to become a lender under the relevant syndicated loan facility satisfies the public offer test (see subsection (6A));
this section applies to the interest.
Note: Subsection (4) does not apply to the interest because that subsection deals only with interest paid on a debenture or debt interest by the issuing eligible unit trust.

Tax not payable
 (3) Tax is not payable under this Division in respect of interest to which this section applies.

No exemption for interest paid to certain associates of the issuing trustee
 (4) This section does not apply to interest paid by the trustee of an eligible unit trust to a person in respect of the debenture or debt interest if, at the time of the payment, the trustee knows, or has reasonable grounds to suspect, that:
 (a) the person is an associate of the trustee; and
 (b) either:
 (i) the associate is a non‑resident and the payment is not received by the associate in respect of a debenture or debt interest that the associate acquired in carrying on a business in Australia at or through a permanent establishment of the associate in Australia; or
 (ii) the associate is a resident of Australia and the payment is received by the associate in respect of a debenture or debt interest that the associate acquired in carrying on a business in a