When the outward investing financial entity (non-ADI) rules apply to the group
Group composition
The head company is an outward investing financial entity (non-ADI) where there is at least one member of the group that is a financial entity (this can be the head company or any other group member) and no member of the group is an ADI.
Classification
The head company is classified as an outward investing financial entity (non-ADI) and Subdivision 820-B of the ITAA 1997 applies.
The head company will be an outward investing financial entity (non-ADI) if one of its associate entities is an outward investing entity. Even if the head company or any other company in the group is foreign owned, it will still be classified as an outward investing entity if an associate entity is an outward investor, as the outward investor rules take priority over those applying to inward investing entities.
The special rules about on-lent amounts and zero-capital amounts apply to all of the group's assets that satisfy the definitions, whether those assets are held by the actual financial entities in the group or by other entities in the group.
For more information, refer to subsection 820-583(3) of the ITAA 1997.
When the inward investor (financial) rules apply to the group
Group composition
The head company is a foreign controlled Australian entity and not also an outward investor, and at least one member of the group (which can be the head company) is a financial entity and no member is an ADI.
Classification
The head company is an inward investor (financial) and the rules in Subdivision 820-C of the ITAA 1997 apply.
The special rules about on-lent amounts and zero-capital amounts apply to all the group's assets that satisfy the definitions, whether those assets are held by the actual financial entities in the group or by other entities in the group.
For more information, refer to subsections 820-583(4) and 820-583(6) of the ITAA 1997.
When the general class investor rules apply to the group
Group composition
The head company is a general class investor, and no member of the group is a financial entity or an ADI.
Classification
General class investor and the rules in Subdivision 820-AA of the ITAA 1997 apply.
For more information, refer to subsection 820-583(1) of the ITAA 1997.