Section 327 — Income Tax Assessment Act 1936: Eligible finance shares

For the purposes of this Part, a share in a company is an eligible finance share if all the following conditions are satisfied: (a) the shareholder is an AFI or an AFI subsidiary; (b) the share was issued to the shareholder by the company in the ordinary course of business carried on by the shareholder; (c) the shareholder is not an associate of the company; (d) having regard to: (i) the manner in which the amount of dividends in respect of the share are to be calculated; and (ii) the conditions applicable to the payment of dividends in respect of the share; and (iii) any other relevant matters; the payment of the dividends in respect of the share may reasonably be regarded as equivalent to the payment of interest on a loan where the interest accrues at intervals not exceeding 12 months and is paid not later than 12 months after it accrues.