On-lent amount
This is a term used in the adjusted on-lent amount calculation for a financial entity to describe all amounts the entity has lent to other entities. It also includes the value of certain leases and certain securities agreements.
An on-lent amount is relevant to calculating a financial entity's safe harbour debt amount. Generally, on-lent amounts represent the financial entity's on-lending business, which is subject to a concessionary on-lending rule.
A financial entity's on-lent amount is the sum of the following assets:
- the value of debt interests issued to the financial entity by other entities
- the value of leases for the hire of goods that are not debt interests issued by other entities where the
- leases are for 6 months or more
- leases are part of the business of hiring goods carried on by the financial entity
- financial entity's business of hiring goods is not carried on predominantly for the purpose of hiring goods to any of its associates
- the value of securities held by the financial entity that
- have been sold by the entity under a reciprocal purchase agreement, sell-buyback arrangement or securities loan arrangement
- have not yet been repurchased by the entity under the agreement or arrangement
- for entity's carrying on a business of dealing in securities but not predominately for the purposes of dealing in securities with, or on behalf of, the entity's associates, all the shares that
- the entity holds
- are listed for quotation in the official list of an approved stock exchange
- are not shares in any of the entity's associate entities.
For more information, see subsection 995-1(1) of the ITAA 1997.
Outward investing financial entity (non-ADI)
An entity is an outward investing financial entity (non-ADI) for a period that is all or a part of an income year if satisfies the following 2 conditions throughout that period:
- It is a financial entity, and
- It is one or more of the following
- an Australian controller of at least one Australian controlled foreign entity
- an Australian entity that carries on business overseas through an overseas permanent establishments
- an Australian entity that is an associate entity of another Australian entity that is an outward investing financial entity (non-ADI) or an outward investing entity (ADI).
However, an entity is not an outward investing financial entity (non-ADI) for a period that is all or part of an income year if it is a general class investor for that year.
For the purposes of determining whether an Australian entity is an associate entity of another Australian entity that is an outward investing financial entity (non-ADI), assume the other entity is a financial entity for all of the income year. This assumption ensures that an Australian entity will be subject to the thin capitalisation rules if it is an associate entity of a general class investor that, assuming it were a financial entity, would be an outward investing financial entity (non-ADI).
For more information, see subsection 820-85(2) of the ITAA 1997.
Outward investing entity (ADI)
An entity is an outward investing entity (ADI) for a period that is all or a part of an income year if throughout that period the entity is an ADI to which one of the following applies:
- the entity is an Australian controller of at least one Australian controlled foreign entity
- the entity is an Australian entity that carries on a business overseas at or through one or more overseas permanent establishments
- the entity is an Australian entity that is an associate entity of another entity that is one of the following
- an outward investing financial entity (non-ADI), or
- outward investing (ADI), or
- a general class investor that, if it were assumed that it were a financial entity, would be an outward investing financial entity (non-ADI).
However, an entity is not an outward investing entity (ADI) for a period that is all or a part of an income year if it is a general class investor for that year.
For more information, see subsection 820-300(2) of the ITAA 1997.