Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 3A - Convertible notes  

SECTION 82P   BONUS SHARE ALLOTMENTS  

82P(1)    
For the purposes of this section, the making of a bonus share allotment by a company is the allotment by the company of shares (in this section referred to as bonus shares ) in the capital of the company (being shares all of which are of the same class as each other) to persons who are the holders of other shares (in this section referred to as qualifying shares ) in the capital of the company or in the capital of another company (being shares all of which are of the same class as each other but which are not necessarily of the same class as the bonus shares), being an allotment made to the holders of all shares of the same class as the qualifying shares or an allotment made in pursuance of applications for the allotment of the bonus shares by the holders of the qualifying shares in accordance with an invitation to apply for the allotment of shares given to the holders of the qualifying shares and the holders of all other shares of the same class as the qualifying shares.

82P(2)    

Where:

(a) the option to convert that exists under a convertible note is an option to have shares allotted to the holder or owner of the note; and

(b) the terms applicable to the note are such that, if a bonus share allotment is made by the company that issued the note or by another company in respect of qualifying shares that are of the same class as the shares that are to be allotted to the holder or owner of the note upon the exercise of the option to convert, the holder or owner of the note is to have the right to have allotted to him or her shares in the capital of the company or of that other company, as the case may be, of the same class as the bonus shares on terms and conditions that are the same as or correspond with, or are no more favourable to him or her than, the terms and conditions on which bonus shares are allotted to any holder of qualifying shares;

that right shall, for the purposes of subparagraph 82SA(1)(d)(ii) , be deemed to be an approved right relating to the allotting or transfer of bonus shares to the holder or owner of the convertible note.

82P(3)    

Where:

(a) the option to convert that exists under a convertible note is an option to have shares transferred to the holder or owner of the note; and

(b) the terms applicable to the note are such that, if a bonus share allotment is made by the company that issued the note or by another company, being an allotment the qualifying shares relating to which include the shares that are to be transferred to the holder or owner of the note upon the exercise of the option to convert, and bonus shares allotted in respect of the qualifying shares to be so transferred are allotted to the holder of those shares on terms and conditions that are the same as or correspond with, or are no more favourable to him or her than, the terms and conditions on which bonus shares are allotted to any other holder of qualifying shares, the holder or owner of the note is to have the right to have the bonus shares allotted to that person transferred to him or her upon the payment by him or her, where a consideration was paid or is payable in respect of the allotment of the bonus shares to the other person, of a consideration not less than that consideration;

that right shall, for the purposes of sub-paragraphs 82S(1)(d)(ii) and 82SA(1)(d)(ii), be deemed to be an approved right relating to the allotting or transfer of bonus shares to the holder or owner of the convertible note.