Facts
US Head Co acquired an unrelated US business company by acquiring US New Co via its wholly owned subsidiary US Sub Co. 2. The purchase of this acquisition was funded by US Head Co. 3. US Sub Co formed a Limited Liability Company, US LLC, and transferred its shares in US New Co to US LLC. 4. The consideration given by US LLC to US Sub Co for US New Co shares included the issue of Redeemable Preference Shares (RPS) denominated in Australian dollars, Common Shares ($US) and other consideration. 5. Subsequent to the purchase, US Sub Co incorporated an Eligible Tier 1 company, New Aust Co, in Australia adding it to an existing Single Entity Consolidated Group to form an Australian Multiple Entry Consolidated (MEC) Group with Aust Co as its Provisional Head Entity. 6. US Sub Co sold its Australian denominated RPS held in US LLC to New Aust Co in exchange for an interest bearing Promissory Note. 7. US LLC paid dividends on the RPS to New Aust Co. 8. New Aust Co used the dividend revenue on the RPS to pay interest on the promissory note to US Sub Co. The fixed yield on the RPS was one percentage point higher than the interest payable on the Promissory Note.