Australian Tax Office Guidance

On 14 February 2020, the Australian Tax Office (ATO) released guidance in relation to the tax position for holders of hybrid capital securities issued on or after 9 May 2017, which includes NAB Capital Notes 3. The guidance addresses a possible technical interpretation of the tax hybrid mismatch rules, which could otherwise disallow a holder from claiming franking benefits in certain circumstances. The ATO guidance confirms that, at this time, the ATO is not planning to take any action in respect of investors’ compliance with the current law.

In any event, the ATO class ruling on NAB Capital Notes 3 (CR 2019/22) confirmed that the current tax hybrid mismatch rules should not apply to distributions paid on NAB Capital Notes 3. Therefore, NAB expects that there is no impact to investors’ ability to continue to claim franking benefits in respect of NAB Capital Notes 3.

A copy of the ATO Guidance, opens in new window is available from the ATO’s website

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