Commonwealth Numbered Acts Commonwealth Numbered Acts
Income Tax Assessment Act 1936
1 Paragraph 128F(1)(e)
Repeal the paragraph, substitute:
(c) for a debt interest other than a debenture--the debt interest:
(i) is a non‑equity share; or
(ii) consists of 2 or more related schemes (within the meaning of the Income Tax Assessment Act 1997 ) where one or more of them is a non‑equity share; or
(iii) is a syndicated loan; or
(iv) is prescribed by the regulations for the purposes of this section; and
(d) either:
(i) the issue of the debenture or debt interest satisfies the public offer test set out in subsection (3) or (4); or
(ii) for a syndicated loan--the invitation to become a lender under the relevant syndicated loan facility satisfies the public offer test set out in subsection (3A).
2 Paragraph 128F(1A)(d)
Repeal the paragraph, substitute:
(d) for a debt interest other than a debenture--the debt interest:
(i) is a non‑equity share; or
(ii) consists of 2 or more related schemes (within the meaning of the Income Tax Assessment Act 1997 ) where one or more of them is a non‑equity share; or
(iii) is a syndicated loan; or
(iv) is prescribed by the regulations for the purposes of this section; and
(e) either:
(i) the issue of the debenture or debt interest satisfies the public offer test set out in subsection (3) or (4); or
(ii) for a syndicated loan--the invitation to become a lender under the relevant syndicated loan facility satisfies the public offer test set out in subsection (3A).
3 Paragraph 128F(1B)(b)
Repeal the paragraph, substitute:
(b) for a debt interest other than a debenture--the debt interest:
(i) is a non‑equity share; or
(ii) consists of 2 or more related schemes (within the meaning of the Income Tax Assessment Act 1997 ) where one or more of them is a non‑equity share; or
(iii) is a syndicated loan; or
(iv) 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 out in subsection (3) or (4); or
(ii) for a syndicated loan--the invitation to become a lender under the relevant syndicated loan facility satisfies the public offer test set out in subsection (3A);
4 After subsection 128F(3)
Insert:
(3A) An invitation to become a lender under a syndicated loan facility by a company satisfies the public offer test if the invitation was made:
(a) to at least 10 persons each of whom:
(i) was carrying on a business of providing finance, or investing or dealing in securities, in the course of operating in financial markets; and
(ii) was not known, or suspected, by the company to be an associate (see subsection (9)) of any of the other persons covered by this paragraph; or
(b) publicly in electronic form, or in another form, that was used by financial markets for dealing in debentures or debt interests; or
(c) to a dealer, manager or underwriter, in relation to the placement of debentures or debt interests, who, under an agreement with the company, made the invitation to become a lender under the facility within 30 days in a way covered by paragraph (a) or (b).
5 After subsection 128F(5)
Insert:
(5AA) An invitation to become a lender under a syndicated loan facility is taken never to have satisfied the public offer test if, at the time the invitation is made, the company knew, or had reasonable grounds to suspect, that:
(a) an associate of the company is or will become a lender under the facility; and
(b) either:
(i) the associate is a non‑resident and the associate is not or would not become a lender under the facility 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 associate is or would become a lender under the facility in carrying on a business in a country outside Australia at or through a permanent establishment of the associate in that country; and
(c) the associate is not or would not become a lender under the facility in the capacity of:
(i) a dealer, manager or underwriter in relation to the invitation; or
(ii) a clearing house, custodian, funds manager or responsible entity of a registered scheme.
Note: The heading to subsection 128F(5) is altered by omitting " Issues " and substituting " Issues and invitations ".
6 Subsection 128F(9)
Insert:
"syndicated loan" means a loan or other form of financial accommodation that is provided under a syndicated loan facility, being a facility that has 2 or more lenders.
7 Subsection 128F(9)
Insert:
"syndicated loan facility" has the meaning given by subsections (11), (12) and (13).
8 At the end of section 128F
Add:
(11) A written agreement is a syndicated loan facility if:
(a) the agreement describes itself as a syndicated loan facility or syndicated facility agreement; and
(b) the agreement is between one or more borrowers and at least 2 lenders; and
(c) under the agreement each lender severally, but not jointly, agrees to lend money to, or otherwise provide financial accommodation to, the borrower or borrowers; and
(d) the amount to which the borrower or borrowers will have access at the time the first loan or other form of financial accommodation is to be provided under the agreement is at least $100,000,000 (or a prescribed amount).
(12) A written agreement is also a syndicated loan facility if:
(a) the agreement describes itself as a syndicated loan facility or syndicated facility agreement; and
(b) the agreement is between one or more borrowers and one lender where the agreement provides for the addition of other lenders; and
(c) the agreement provides that, when other lenders are added, each lender severally, but not jointly, agrees to lend money to, or otherwise provide financial accommodation to, the borrower or borrowers; and
(d) the amount to which the borrower or borrowers will have access at the time the first loan or other form of financial accommodation is to be provided under the agreement is at least $100,000,000 (or a prescribed amount).
(13) However, an agreement under which there are 2 or more borrowers is a syndicated loan facility only if all of them are:
(a) members of the same wholly‑owned group (within the meaning of the Income Tax Assessment Act 1997 ); or
(b) parties to the same joint venture; or
(c) associates of each other.
(14) For the purposes of this section, a change (including by novation) to the lenders under a syndicated loan facility does not result in a different agreement.
(15) For a debt interest that consists of 2 or more related schemes (within the meaning of the Income Tax Assessment Act 1997 ) where one or more of them is a non‑equity share, this section applies only to interest paid in respect of the non‑equity share.
Note: Subsection 128A(1AB) defines interest for the purposes of this Division. Under that subsection, dividends paid in respect of a non‑equity share are treated as being interest.
(16) The rule in subsection (15) does not apply to the extent that interest in respect of the other related scheme or schemes would be interest to which this section applies in respect of a debenture or debt interest.
9 Subsection 128FA(1)
Omit all the words after "issued by the trustee", substitute:
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)).
10 Paragraph 128FA(2)(b)
Repeal the paragraph, substitute:
(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));
11 After subsection 128FA(6)
Insert:
(6A) For the purposes of working out under this section whether an invitation to become a lender under a syndicated loan facility satisfies the public offer test, subsections 128F(3A) and (5AA) apply to the trustee of the eligible unit trust in a corresponding way to the way in which those subsections apply to a company, subject to subsection (7) of this section.
Note: The heading to subsection 128FA(6) is replaced by the heading " Public offer test ".
12 Subsections 128FA(7)
Omit "subsections 128F(3) to (5) as mentioned in subsection (6) of this section", substitute "subsection 128F(3), (3A), (4), (5) or (5AA) as mentioned in subsection (6) or (6A) of this section".
13 After subsection 128FA(7)
Insert:
(7A) For the purposes of this section, a change (including by novation) to the lenders under a syndicated loan facility does not result in a different agreement.
14 Subsection 128FA(8)
Insert:
"syndicated loan" has the same meaning as in section 128F.
15 Subsection 128FA(8)
Insert:
"syndicated loan facility" has the same meaning as in section 128F.
16 Application
(1) The amendments made by this Schedule apply to interest paid in respect of debt interests issued on or after 7 December 2006 (the start day ).
(2) For the purposes of subitem (1), a debt interest is treated as being issued before the start day if it is issued under or results from a written agreement entered into on or after 21 March 2005 and before the start day.
(3) However, subitem (2) does not apply to the extent that the agreement referred to in that subitem is altered after the start day to extend its term.