Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-EAB - Third party debt concepts  

Operative provisions

SECTION 820-427B   Modified third party debt conditions for conduit financing  

820-427B(1)    
If a *debt interest satisfies the conditions in subsection 820-427C(1) in relation to an income year, then this section applies in relation to:

(a)    that debt interest (the relevant debt interest ); and

(b)    the debt interest that is the ultimate debt interest mentioned in subsection 820-427C(1) in relation to the relevant debt interest.

Special rules for third party debt conditions - ultimate debt interest and relevant debt interest

820-427B(2)    
In applying section 820-427A in relation to the income year, in relation to the relevant debt interest and the ultimate debt interest:

(a)    treat the reference in subparagraph 820-427A(3)(d)(ii) to *associate entity debt as being a reference to associate entity debt other than:

(i) a debt interest that satisfies the conditions in subsection 820-427C(1) in relation to the ultimate debt interest; or

(ii) a debt interest issued by an entity that is an *Australian entity and that has made a choice under subsection 820-46(4) to use the third party debt test for the income year; and

(b)    treat references in paragraphs 820-427A(4)(a) and (b) to the entity as including the conduit financer mentioned in paragraph 820-427C(1)(a) and each entity that issues a debt interest that satisfies the conditions in subsection 820-427C(1) in relation to the ultimate debt interest.

Special rules for third party debt conditions - relevant debt interest

820-427B(3)    
In applying subsection 820-427A(3) in relation to the income year, in relation to the relevant debt interest, in addition to applying subsection (2) of this section:

(a)    treat the conditions in paragraphs 820-427A(3)(a) and (b) as being satisfied; and

(b)    treat subsection 820-427A(3) as also including the condition that the ultimate debt interest satisfies the *third party debt conditions (having regard to subsection (2) of this section) in relation to the income year.