Income Tax Assessment Act 1997

Chapter 4 inserted by No 162 of 2001.

Part 4-5 inserted by No 162 of 2001.

Division 820 inserted by No 162 of 2001.

Subdiv 820-C heading amended by No 23 of 2024, s 3 and Sch 2 item 54, by inserting " financial " , effective 1 July 2024. For application provisions, see note under s 705-60 .

Subdiv 820-C inserted by No 162 of 2001.

S 820-218 repealed by No 23 of 2024, s 3 and Sch 2 item 67, effective 1 July 2024. For application provisions, see note under s 705-60 . S 820-218 formerly read:

SECTION 820-218 Worldwide gearing debt amount - inward investor (general)  
820-218
If the entity is an *inward investor (general) for the income year, the worldwide gearing debt amount is the result of applying the method statement in this section. Method statement

Step 1.

Divide the entity ' s *statement worldwide debt for the income year by the entity ' s *statement worldwide equity for that year.

Step 2.

Add 1 to the result of step 1.

Step 3.

Divide the result of step 1 by the result of step 2.

Step 4.

Multiply the result of step 3 in this method statement by the result of step 4 in the method statement in section 820-205.

Step 5.

Add to the result of step 4 the average value, for that year, of the entity ' s *associate entity excess amount. The result of this step is the worldwide gearing debt amount .

Example:

MLO Limited, a company that is not an Australian entity, has investments in Australia. MLO Limited has statement worldwide debt of $120 million and statement worldwide equity of $40 million.

The result of applying step 1 is therefore 3. Dividing 3 by 4 (through applying steps 2 and 3) and multiplying the result by $75 million (which is the result of step 4 of the method statement in section 820-205) equals $56.25 million. As the average value of the company ' s associate entity excess amount is $4 million, the worldwide gearing debt amount is therefore $60.25 million.

S 820-218 inserted by No 110 of 2014, s 3 and Sch 1 item 20, applicable to assessments for income years starting on or after 1 July 2014.