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INCOME TAX ASSESSMENT ACT 1936 - SECT 82L

Interpretation

             (1)  In this Division, unless the contrary intention appears:

"attributable income" has the meaning given by Division 7 of Part X.

"CFC or controlled foreign company" has the meaning given by section 340.

"convertible note" includes a note issued by a company that provides, whether in pursuance of or by virtue of a trust deed or otherwise:

                     (a)  that the amount of the loan to the company that is evidenced, acknowledged or created by the note or to which the note relates:

                              (i)  whether with or without interest;

                            (iii)  whether at the option of the holder or owner of the note or of some other person or not;

                            (iv)  whether in whole or in part; or

                             (v)  whether exclusively or otherwise;

                            is to be or may be converted into shares in the capital of the company or of another company or is to be or may be redeemed, repaid or satisfied by:

                            (vi)  the allotment or transfer of shares in the capital of the company or of some other company, whether to the holder or owner of the note or to some other person;

                           (vii)  the acquisition of such shares, whether by the holder or owner or by some other person, otherwise than as mentioned in subparagraph (vi); or

                          (viii)  application in or towards paying-up, in whole or in part, the balance unpaid on shares issued or to be issued by the company or by some other company, whether to the holder or owner or to some other person; or

                     (b)  that the holder or owner of the note is to have, or may have, any right or option to have allotted or transferred to him or her or to some other person, or for him or her or some other person otherwise to acquire, shares in the capital of the company or of some other company.

"foreign loan" means a loan to a company raised outside Australia in a currency other than the currency of Australia.

"instrument" includes debenture, bond, certificate, receipt or any other document or writing.

"issued includes given and executed, and issue" has a corresponding meaning.

"loan" , in relation to a company, means:

                     (a)  a loan, advance or deposit of money to or with the company;

                     (b)  money subscribed to the company; or

                     (c)  any other form of debt or liability of the company;

whether secured or unsecured and whenever redeemable, repayable or to be satisfied.

"note" means a note or other instrument issued by a company that evidences, acknowledges, creates or relates to a loan to the company.

"prescribed stock exchange" means an approved stock exchange (within the meaning of the Income Tax Assessment Act 1997 ) operating in Australia.

"qualified person" , in relation to the valuing of a share in the capital of a company, means a person registered as a company auditor under a law in force in a State or a Territory, but does not include:

                     (a)  a director, secretary or employee of the company;

                     (b)  a partner, employer or employee of a person referred to in paragraph (a); or

                     (c)  a partner or employee of an employee of a person so referred to.

"the date of offer" , in relation to a loan to a company means the earliest date on which, by any relevant prospectus, notice, circular, advertisement or other written invitation, any person was or persons were invited to subscribe to the loan:

                     (a)  in the case of a new loan--by the payment of money to the company; or

                     (b)  in the case of an approved replacement loan--by converting, in whole or in part, an earlier loan, or by converting, in whole or in part, an earlier loan and the payment of money to the company.

"the maturity date" , in relation to a loan to which a convertible note applies, means the date by which the whole of the loan is, under the terms applicable to the note, to be repaid, redeemed or satisfied.

"the relevant valuation period" , in relation to a share, means:

                     (a)  where neither paragraph (b) nor (c) applies in relation to the share--the period of one month ending on the date that is the valuation date in relation to the share;

                     (b)  where:

                              (i)  the share is included in a class of shares that, during the whole of the period of 2 months ending on the valuation date, was listed for quotation in the official list of a stock exchange that was a prescribed stock exchange during the whole of that period of 2 months, or in the official lists of 2 or more stock exchanges each of which was a prescribed stock exchange during the whole of that period of 2 months; and

                             (ii)  fully paid shares included in that class of shares were not recorded by that stock exchange or by any of those stock exchanges, as the case may be, as having been sold during the period of one month specified in paragraph (a) but were recorded by that stock exchange or by one or more of those stock exchanges, as the case may be, as having been sold during the period of one month immediately preceding the commencement of the period of one month so specified;

                            that preceding period of one month; or

                     (c)  where:

                              (i)  the share is included in a class of shares that, during the whole of the period of 3 months ending on the valuation date, was listed for quotation in the official list of a stock exchange that was a prescribed stock exchange during the whole of that period of 3 months, or in the official lists of 2 or more stock exchanges each of which was a prescribed stock exchange during the whole of that period of 3 months; and

                             (ii)  fully paid shares included in that class of shares were not recorded by that stock exchange or by any of those stock exchanges, as the case may be, as having been sold during the period of 2 months ending on the valuation date but were recorded by that stock exchange or by one or more of those stock exchanges, as the case may be, as having been sold during the period of one month immediately preceding the commencement of that period of 2 months;

                            that preceding period of one month.

"the valuation date" , in relation to a share, means the date that is earlier by 6 weeks than the date that is the date of offer in relation to the loan in respect of which the value of the share is to be ascertained.

             (2)  Where the combined effect or operation of 2 or more related instruments, whether issued at the same time or not, would have the effect or operation of a convertible note, those instruments shall, for the purposes of this Division, be deemed to be together a convertible note.

             (3)  Where:

                     (a)  a company issues a note that provides that the amount of the loan to the company that is evidenced, acknowledged or created by the note or to which the note relates:

                              (i)  whether with or without interest;

                            (iii)  whether at the option of the holder or owner of the note or of some other person or not;

                            (iv)  whether in whole or in part; or

                             (v)  whether exclusively or otherwise;

                            is to be or may be redeemed, repaid or satisfied by the issue, whether by the same company or by another company, of an instrument or a series of instruments; and

                     (b)  that instrument, or any instrument in that series of instruments, is to provide, whether in pursuance of or by virtue of a trust deed or otherwise, as mentioned in paragraph (a) or (b) of the definition of convertible note in subsection (1);

that note and the instrument, or that note and each of the instruments in the series of instruments, shall, for the purposes of this Division, be deemed to be a convertible note.

             (4)  For the purposes of this Division, a convertible note issued by a company applies to a loan to a company if it evidences, acknowledges or creates the loan.

             (5)  A reference in this Division to the terms, or a term, applicable to a convertible note shall be read as including a reference to terms, or a term, that so apply or applies in pursuance of or by virtue of a trust deed or otherwise.



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