INCOME TAX ASSESSMENT ACT 1997 (ARCHIVE)

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-F - Thin capitalisation rules for resident TC groups  

How this Division applies to a resident TC group

SECTION 820-570 (ARCHIVE)   Effect on safe harbour capital amount if foreign-controlled Australian ADI in the group on-lends section 128F amounts  

820-570(1)    
For the purposes of working out the *safe harbour capital amount of a *resident TC group for an income year, if:

(a) the group includes an entity (the ADI subsidiary ) that is at the end of the income year both a *100% subsidiary of a *foreign bank and an *ADI; and

(b) the ADI subsidiary has:

(i) issued *debentures or *debt interests covered by section 128F (which exempts interest on the debentures or debt interests from withholding tax) of the Income Tax Assessment Act 1936 ; and

(ii) made proceeds of the debentures or debt interests available to an *Australian permanent establishment of the foreign bank, as loans to the Australian permanent establishment, for use in its Australian business; and

(c) the Australian permanent establishment is not in the resident TC group at the end of the income year;

the group's *risk-weighted assets at a particular time are reduced by the total amounts of proceeds of the debentures or debt interests that are at that time so made available by the ADI subsidiary.

820-570(2)    
This section applies only to the 2001-2002 income year and to each of the next 4 income years.