DEVELOPMENT ALLOWANCE AUTHORITY ACT 1992 (REPEALED)

CHAPTER 3 - INFRASTRUCTURE BORROWINGS

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PART 2 - INTERPRETATION: INFRASTRUCTURE BORROWINGS ETC.

SECTION 93I INFRASTRUCTURE BORROWINGS - BORROWER REQUIREMENTS

93I(1) Borrower requirements.

For a borrowing to be an infrastructure borrowing, the requirements of this section must be met.

93I(2) Basic requirements.

The borrower must:

(a) be:

(i) in any case - an incorporated body (not in the capacity of trustee) at the time of the borrowing or a corporate limited partnership (not in the capacity of trustee) in relation to the year of income in which the borrowing takes place; or

(ii) in the case of a direct infrastructure borrowing or a refinancing infrastructure borrowing that relates to a direct infrastructure borrowing - a public trading trust (within the meaning of section 102R of the Tax Act), in relation to the year of income in which the borrowing takes place; and

(b) where the borrower is an incorporated body or a corporate limited partnership and the borrowing is a direct infrastructure borrowing or a refinancing infrastructure borrowing that relates to such a direct infrastructure borrowing - at the time of the borrowing, intend to be an incorporated body (not in the capacity of trustee) throughout the borrower requirement period, or a corporate limited partnership (not in the capacity of trustee) throughout each year of income in which any part of the borrower requirement period occurs; and

(c) where the borrower is a trust to which subparagraph (a)(ii) applies - at the time of the borrowing, intend to be such a trust in relation to each year of income in which any part of the borrower requirement period occurs; and

(d) where the borrower is an incorporated body or a trust to which subparagraph (a)(ii) applies - not be making the borrowing in partnership with anyone else; and

(e) in any case - subject to subsection (4), not be a government body or government owned (see subsection (3)) at the time of the borrowing.

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History

S 93I(2) amended by No 53 of 2016, s 3 and Sch 5 item 4, by omitting " a corporate unit trust (within the meaning of section 102J of the Tax Act), or " before " a public trading trust " from para (a)(ii), applicable to assessments for income years starting on or after 1 July 2016. No 53 of 2016 (as amended by No 15 of 2019), s 3 and Sch 5 Pt 4 contains the following transitional provision:

Part 4 - Transitional
75 Transitional rule for 20% tracing requirement and repeal of Division 6B - imputation
(1)
This item applies if at a time (the cessation time ), on or after the commencement of this Schedule, either:

(a) section 102K of the Income Tax Assessment Act 1936 ceases to apply to the trustee of a trust because of the repeal of that section by Part 2 of this Schedule; or

(b) section 102S of that Act ceases to apply to the trustee of a trust because of the amendment made by Part 1 of this Schedule.

(2)
Subitems (3) and (3A) apply if:

(a) an event happens in respect of the trust that is described in:

(i) the table in subsection 205-15(1) of the Income Tax Assessment Act 1997 ; or

(ii) the table in subsection 205-30(1) of that Act; and

(b) the event happens on or after the cessation time but before 1 July 2019; and

(c) the event is:

(i) the trust paying income tax for an income year starting before 1 July 2016; or

(ii) the trust paying a PAYG instalment in respect of income tax for an income year starting before 1 July 2016; or

(iii) the trust receiving a refund of income tax for an income year starting before 1 July 2016; or

(iv) the trust franking a distribution; or

(v) the trust ceasing to be a franking entity.

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S 75(2) amended by No 15 of 2019, s 3 and Sch 1 items 34 - 36, by substituting " Subitems (3) and (3A) apply " for " Subitem (3) applies " , " 1 July 2019 " for " 1 July 2018 " in para (b) and inserting para (c)(v), applicable in relation to the 2018-19 income year and later income years.

(2A)
However, subparagraph (2)(c)(v) does not apply unless the trust ' s franking account is in surplus immediately before the trust ceases to be a franking entity.
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S 75(2A) inserted by No 15 of 2019, s 3 and Sch 1 item 37, applicable in relation to the 2018-19 income year and later income years.

(3)
For the purposes of determining whether a franking credit or franking debit arises in the trust ' s franking account as a result of the event:

(a) treat the trust as a corporate tax entity at the time the event happens; and

(b) treat the trust as satisfying the residency requirement in section 205-25 of the Income Tax Assessment Act 1997 for the income year in which the event happens.

(3A)
If the event is an event described in item 4 of the table in subsection 205-30(1) of the Income Tax Assessment Act 1997 , treat the event as happening on 1 July 2019.
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S 75(3A) inserted by No 15 of 2019, s 3 and Sch 1 item 38, applicable in relation to the 2018-19 income year and later income years.

(4)
Subitems (5) and (6) apply if:

(a) the trust makes a distribution on or after the cessation time but before 1 July 2019; and

(b) the trust ' s franking account is in surplus just before the trust makes the distribution; and

(c) the distribution is not made out of income derived in relation to the 2016-17 income year or a later income year.
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S 75(4) amended by No 15 of 2019, s 3 and Sch 1 items 39 - 41, by substituting " Subitems (5) and (6) apply " for " Subitem (5) applies " , " 1 July 2019 " for " 1 July 2018 " in para (a) and inserting para (c), applicable in relation to the 2018-19 income year and later income years.

(5)
For the purposes of determining whether the trust franks the distribution as a result of the event:

(a) treat the trust as a corporate tax entity at the time it makes the distribution; and

(b) treat the trust as satisfying the residency requirement in section 202-20 of the Income Tax Assessment Act 1997 at the time it makes the distribution.
Note:

As a result, the trust will satisfy the requirement in paragraph 202-5(a) of that Act in respect of the distribution. If the other requirements in section 202-5 of that Act are satisfied in respect of the distribution, this means that the trust franks the distribution.

(6)
Treat a beneficiary of the trust who receives the distribution as receiving, for the purposes of the income tax law, a dividend from a corporate tax entity.
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S 75(6) inserted by No 15 of 2019, s 3 and Sch 1 item 42, applicable in relation to the 2018-19 income year and later income years.

93I(3) Meaning of government owned .

For the purposes of paragraph (2)(e):

(a) an incorporated body is government owned if:

(i) it is limited by shares; and

(ii) a government body is the beneficial owner of at least 50% of the total rights:

(A) to dividends paid by the body; or

(B) to distributions of capital of the body on winding-up or otherwise; or

(C) to vote at meetings of shareholders of the body; and

(b) a corporate limited partnership is government owned if a government body is the beneficial owner of more than 50% of the interests in profits or capital of the partnership; and

(c) a trust is government owned if a government body is the beneficial owner of more than 50% of the interests in income or corpus of the trust.

93I(4) Paragraph (2)(e) not to apply to certain bodies.

Paragraph (2)(e) does not apply to a borrower if the borrower is, in accordance with criteria published in the Gazette by the Minister for the purposes of this subsection, a body that operates on a commercial basis.

93I(4A)
In the case of:

(a) an indirect infrastructure borrowing; or

(b) a refinancing infrastructure borrowing that relates to an indirect infrastructure borrowing;

the borrower must be:

(c) a non-exempt resident company at the time of the borrowing; or

(d) a non-exempt resident corporate limited partnership in relation to the year of income in which the borrowing takes place.

93I(4B)
If the borrower is an incorporated company (not in the capacity of trustee) and the borrowing is:

(a) an indirect infrastructure borrowing that relates to a direct infrastructure borrowing; or

(b) a refinancing infrastructure borrowing that relates to an indirect infrastructure borrowing covered by paragraph (a);

the borrower must, at the time of the borrowing, intend to be a non-exempt resident company throughout the applicable borrower requirement period. For this purpose, the applicable borrower requirement period is the borrower requirement period in relation to the direct infrastructure borrowing.

93I(4C)
If the borrower is a corporate limited partnership (not in the capacity of trustee) in relation to the year of income in which the borrowing takes place and the borrowing is:

(a) an indirect infrastructure borrowing that relates to a direct infrastructure borrowing; or

(b) a refinancing infrastructure borrowing that relates to an indirect infrastructure borrowing covered by paragraph (a);

the borrower must, at the time of the borrowing, intend to be a non-exempt resident corporate limited partnership in relation to each year of income in which any part of the applicable borrower requirement period occurs. For this purpose, the applicable borrower requirement period is the borrower requirement period in relation to the direct infrastructure borrowing.

93I(5) Direct infrastructure borrowings by listed companies.

If:

(a) the infrastructure borrowing is:

(i) a direct infrastructure borrowing; or

(ii) a refinancing infrastructure borrowing that relates to a direct infrastructure borrowing;

by an incorporated body limited by shares; and

(b) the incorporated body is a listed company; and

(c) at the time of the borrowing, a person is the beneficial owner of shares carrying more than half the voting rights in the incorporated body;

that person must not, at the time of the borrowing, intend to dispose of enough of those shares to cause the number of voting rights to fall to or below half during the borrower requirement period in relation to the direct infrastructure borrowing.

93I(6) Direct infrastructure borrowings by unlisted companies.

If:

(a) the infrastructure borrowing is:

(i) a direct infrastructure borrowing; or

(ii) a refinancing infrastructure borrowing that relates to a direct infrastructure borrowing;

by an incorporated body limited by shares; and

(b) the incorporated body is not a listed company; and

(c) at the time of the borrowing, a person either alone or together with an associate or associates is the beneficial owner of shares carrying more than half the voting rights in the incorporated body;

that person, or that person and the associates, must not intend, at the time of the borrowing, to dispose of enough of those shares to cause the number of voting rights to fall to or below half during the borrower requirement period in relation to the direct infrastructure borrowing.

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