How the rules work

The thin capitalisation rules apply differently depending on the type of entity.

How the rules work for financial entities (non-ADI).

The concept of control is central when considering whether the thin capitalisation rules apply.

A ‘general class investor’ is not a financial entity or an ADI but is subject to the thin capitalisation regime.

Modified definitions of associate entity apply for the purposes of Subdivision 820-AA and 820-EAB of the ITAA 1997.

How the fixed ratio test applies for general class investors.

How to apply the group ratio test.

How to apply the third party debt test.