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INCOME TAX ASSESSMENT ACT 1997 - SECT 775.210

Notional loan

             (1)  The rules in this section have effect only for the purposes of this Subdivision.

Notional loan

             (2)  If you issue an * eligible security under a * facility agreement otherwise than as a result of a roll-over, you are taken to have been given a loan (the notional loan ):

                     (a)  of a * foreign currency principal amount equal to the foreign currency face value of the security; and

                     (b)  for a period equal to the term of the security; and

                     (c)  that is taken to be attached to the security; and

                     (d)  the start time of which is the time when you issued the security.

Note 1:       The period of the notional loan may be extended as the result of a later roll-over--see subsection (3).

Note 2:       The notional loan may become attached to a later security as the result of a roll-over--see subsection (3).

Note 3:       The foreign currency principal amount of the notional loan may remain the same, or may fall (but not rise), as a result of a later roll-over--see subsection (3).

Note 4:       If, at a later time, the security is rolled-over, and the foreign currency face value of the new security exceeds the foreign currency face value of the rolled-over security, you are taken to have been given an additional notional loan of a foreign currency principal amount equal to the excess--see subsection (3).

Effect of roll-over

             (3)  The table has effect if an * eligible security is rolled-over under a * facility agreement:

 

Roll-over of eligible security

Item

If the foreign currency face value of the new security...

this is the result...

1

equals the * foreign currency face value of the rolled-over security

(a) the period of each notional loan attached to the rolled-over security is extended by the term of the new security; and

(b) each notional loan attached to the rolled-over security is taken to be attached to the new security.

2

exceeds the * foreign currency face value of the rolled-over security

(a) you are taken to have been given an additional notional loan:

(i) of a foreign currency principal amount equal to the excess; and

(ii) for a period equal to the term of the new security; and

(iii) that is taken to be attached to the new security; and

(iv) the start time of which is the time when you issued the new security; and

(b) the period of each notional loan attached to the rolled-over security is extended by the term of the new security; and

(c) each notional loan attached to the rolled-over security is taken to be attached to the new security.

3

falls short of the * foreign currency face value of the rolled-over security, and there is only one notional loan attached to the rolled-over security

(a) you are taken to have paid a foreign currency amount equal to the shortfall in order to discharge so much of your obligation to pay the foreign currency principal amount of the notional loan as equals the shortfall; and

(b) the period of the notional loan is extended by the term of the new security; and

(c) the notional loan is taken to be attached to the new security.

4

falls short of the * foreign currency face value of the rolled-over security, and there are 2 or more notional loans attached to the rolled-over security

(a) you are taken to have paid a foreign currency amount equal to the shortfall in order to discharge your obligation to pay so much of the total foreign currency principal amounts of the notional loans as equals the shortfall, and to have done so on a first-in first-out basis, that is to say:

(i) first, by fully or partly discharging (as the case requires) your obligation to pay the foreign currency principal amount of the notional loan with the earliest start date; and

(ii) second, if your obligation to pay the foreign currency principal amount of the notional loan with the earliest start date is fully discharged--by fully or partly discharging (as the case requires) your obligation to pay the foreign currency principal amount of the notional loan with the next start date, and so on; and

(b) the period of each notional loan attached to the rolled-over security that is not fully discharged is extended by the term of the new security; and

(c) each notional loan attached to the rolled-over security that is not fully discharged is taken to be attached to the new security.

Consequences if security is not rolled-over

             (4)  If:

                     (a)  you discharge your obligation under an * eligible security issued under a * facility agreement; and

                     (b)  the security is not rolled-over at the time of discharge; and

                     (c)  you have made a choice for roll-over relief for the facility agreement, and that choice is in effect;

then, for each notional loan attached to the security, you are taken to have paid a * foreign currency amount equal to the foreign currency principal amount of the notional loan in order to discharge your obligation to pay the foreign currency principal amount of the notional loan.

Foreign currency

             (5)  For the purposes of the application of this section to a particular * facility agreement that provides for the issue of * eligible securities, foreign currency is the * foreign currency in which the securities are denominated.

Note:          Section 960-50 (Australian currency translation rule) does not affect the operation of this section--see subsection 960-50(10). You translate to Australian currency when you apply section 775- 215 (forex realisation event 6).



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