n 25 July 2012, the ATO released for public comment by 7 September 2012 draft Taxation Ruling TR 2012/D5 entitled "Income tax: debt and equity interests: when is a public unit trust in a stapled group a connected entity of a company for the purposes of paragraph 974-80(1)(b) of the Income Tax Assessment Act 1997?"
This draft Ruling considers arrangements whereby:
- shares in a company are stapled to units in a public unit trust;
- the stapled securities are issued to investors to raise funds primarily for use in the business conducted by the company; and
- the funds raised are predominantly contributed to the public unit trust and then used by the trustee to acquire a debt interest in the company.