New Business Tax System (Debt and Equity) Act 2001 (163 of 2001)

Schedule 1   Debt and equity interests

Part 4   Application of amendments

118   Application of amendments

Definitions

 

(1) In this item:

CGT amendments means the amendments made by items 7 to 32 of this Schedule.

debt and equity test amendments means the amendments made by this Schedule (other than the CGT amendments).

Application of debt and equity test amendments

      

(2) The debt and equity test amendments apply to transactions that take place on or after 1 July 2001. This is so whether the interest in relation to which the transaction takes place was issued before, or is issued on or after, that date. This subitem has effect subject to any election made under subitem (6).

Application of the CGT amendments

      

(3) The amendments made by items 7 to 11 of this Schedule apply to:

(a) equity interests issued or allotted; and

(b) options granted;

on or after 1 July 2001.

      

(4) The amendments made by items 12 to 32 of this Schedule apply to the conversion of a convertible interest, or the exercise of a right, on or after 1 July 2001.

      

(5) Section 130-40 of the Income Tax Assessment Act 1997 applies to all convertible notes acquired before 20 September 1985 as if they were convertible interests.

Application of debt and equity test amendments to interests issued before 1 July 2001

      

(6) If an interest was issued before 1 July 2001, the debt and equity test amendments:

(a) apply only to transactions that take place in relation to the interest on or after 1 July 2004 if the issuer of the interest does not make an election under paragraph (b); and

(b) apply to transactions that take place in relation to the interest on or after 1 July 2001 if the issuer elects to have this paragraph apply to the interest.

      

(7) For the purposes of subitem (6), an interest is taken to be issued on or after 1 July 2001 if:

(a) the interest is issued on or after that date; or

(b) the interest is issued before that date; and:

(i) the terms of the interest are altered on or after that date; or

(ii) the interest is rolled over on or after that date; or

(iii) the original term of the interest is extended on or after that date.

In applying subparagraph (b)(i), disregard minor alterations that do not affect rights and obligations in relation to the interest.

      

(9) If paragraph (6)(a) applies to an interest:

(a) the interest is disregarded for the purposes of paragraph 164-10(1)(b) and subsection 164-15(3) of the Income Tax Assessment Act 1997; and

(b) section 164-15 of the Income Tax Assessment Act 1997 applies to the interest as if references in paragraph 164-15(3)(b) and subsection 164-15(4) to 1 July 2001 were references to 1 July 2004.

      

(10) An election in relation to an interest is effective for the purposes of paragraph (6)(b) only if:

(a) the election is lodged with the Commissioner within:

(i) 90 days after the day on which this Act receives the Royal Assent; or

(ii) such further time as the Commissioner allows; and

(b) an election under paragraph (6)(b) is made in relation to all other interests that:

(i) were issued by the issuer before 1 July 2001; and

(ii) are substantially similar to that interest and in relation to which an election under that subitem can be made; and

(c) the election contains the following information:

(i) the name of the issuer;

(ii) the tax file number of the issuer;

(iii) the legal form of the interest;

(iv) ASX code or other stock exchange listing code allotted to the issue (if applicable);

(v) the date of the issue;

(vi) the face value of the issue;

(vii) the number of interests of that kind on issue when the election is made;

(viii) coupon/dividend rates and terms including contingencies;

(ix) maturity details;

(x) redemption details and terms including contingencies;

(xi) conversion/exercise details.

An election under paragraph (6)(b) cannot be revoked.

      

(11) The Commissioner may allow further time under subparagraph (10)(a)(ii) if he or she:

(a) is satisfied that the issuer would otherwise not have sufficient opportunity to make the election; or

(b) otherwise considers it reasonable to do so.

      

(12) If:

(a) paragraph (6)(a) applies to an interest; and

(b) on or after 1 July 2001 and before 1 July 2004:

(i) the terms of the interest are altered; or

(ii) the interest is rolled over; or

(iii) the original term of the interest is extended;

then:

(c) the debt and equity test amendments apply to the transactions in relation to the interest that take place after the event referred to in paragraph (b) occurs; and

(d) subitem (9) applies to the interest as if references in that subitem to 1 July 2004 were references to the time when that event occurs.

In applying subparagraph (b)(i), disregard minor alterations that do not affect rights and obligations in relation to the interest.

      

(13) A reference in this item to a transaction includes a reference to:

(a) making a return; and

(b) paying a dividend or unit trust dividend; and

(c) making a distribution in relation to a unit trust; and

(d) paying, crediting or lending an amount; and

(e) making a non-share distribution; and

(f) forgiving a debt; and

(g) redeeming, cancelling or buying back an interest; and

(h) converting an interest.