Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 230.55

Single right or obligation or multiple rights or obligations?

  (1)   If you have a right to receive 2 or more * financial benefits, you are taken, for the purposes of this Division, to have a separate right to receive each of those financial benefits.

  (2)   If you have an obligation to provide 2 or more * financial benefits, you are taken, for the purposes of this Division, to have a separate obligation to provide each of those financial benefits.

  (3)   Subsections   (1) and (2) apply for the avoidance of doubt.

Matters relevant to determining what rights and/or obligations constitute particular arrangements

  (4)   For the purposes of this Division, whether a number of rights and/or obligations are themselves an * arrangement or are 2 or more separate arrangements is a question of fact and degree that you determine having regard to the following:

  (a)   the nature of the rights and/or obligations;

  (b)   their terms and conditions (including those relating to any payment or other consideration for them);

  (c)   the circumstances surrounding their creation and their proposed exercise or performance (including what can reasonably be seen as the purposes of one or more of the entities involved);

  (d)   whether they can be dealt with separately or must be dealt with together;

  (e)   normal commercial understandings and practices in relation to them (including whether they are regarded commercially as separate things or as a group or series that forms a whole);

  (f)   the objects of this Division.

In applying this subsection, have regard to the matters referred to in paragraphs   (a) to (f) both in relation to the rights and/or obligations separately and in relation to the rights and/or obligations in combination with each other.

Example 1:   Your rights and obligations under a typical convertible note, including the right to convert the note into a share or shares, would constitute one arrangement.

Example 2:   Your rights and obligations under a typical price - linked or index - linked bond would constitute one arrangement.

Note 1:   If you raised funds by means of a contract that you would not have entered into without entering into another contract, and neither contract could be assigned to a third party without the other also being assigned, this would tend to indicate that your rights and obligations under the 2 contracts together constitute one arrangement.

Note 2:   If the commercial effect of your individual rights and/or obligations in a group or series cannot be understood without reference to the group or series as a whole, this would tend to indicate that all of your rights and/or obligations in the group or series together constitute one arrangement.