Income Tax Assessment Regulations 1997 (Repealed)

PART 6 - THE DICTIONARY  

Division 974 - Debt and equity interests  

Subdivision 974-F - Related concepts  

REGULATION 974-135A  

974-135A   NON-CUMULATIVE REDEEMABLE PREFERENCE SHARES ISSUED BY CREDIT UNION  
For paragraph 974-135(8)(d) of the Act, the obligation in respect of the return of investment on the redemption of a non-cumulative redeemable preference share issued by a credit union is not an effectively non-contingent obligation if:

(a) the share is issued on or after 4 March 2003; and

(b) the share satisfies, at the time it is issued, the criteria set out in section 7 of Guidance Note AGN 111.2 - Tier 2 Capital , published by APRA in September 2000; and

(c) the share is issued subject to the following terms and conditions:

(i) the share has a minimum term of 5 years;

(ii) dividend payments for the share are to be paid only:

(A) out of operating profits from the current year or the immediately previous year; and

(B) to the extent that payment is permitted by law and by relevant regulatory authorities;

(iii) dividend payments for the share are not cumulative;

(iv) any payments made in relation to the share out of net profits or net assets have preferential rights over payments made in relation to ordinary shares (if any) from the same sources;

(v) if the share is to be redeemed - the redemption cannot be carried out without the approval of the board of the credit union;

(vi) if the share is to be redeemed, but the redemption of the share would place the credit union in breach of a prudential standard made under the Banking Act 1959 - the redemption cannot be carried out without the approval of APRA; and

(d) the redemption is carried out on or after 4 March 2003; and

(e) the share is issued only to a member of the credit union; and

(f) a member of the credit union and its connected entities (within the meaning of subsection 995-1(1) of the Act) can together hold not more than 10% by value of the shares of that kind issued by the credit union.