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 to construct a resident TC group for an income year

SECTION 820-510 (ARCHIVE)   Multiple groups  

820-510(1)    
The second choice is to treat the eligible companies referred to in section 820-505 as forming one or more resident TC groups for the income year, on the basis that each resident TC group consists of:

(a) one or more subgroups constructed under subsection (3) of this section; and

(b) each partnership and trust that section 820-515 includes in the resident TC group; and

(c) each *Australian permanent establishment of a *foreign bank that section 820-515 includes in the resident TC group.

820-510(2)    
However, a resident TC group under subsection (1) can consist of or include 2 or more subgroups constructed under subsection (3) only if:

(a) each company in the 2 or more subgroups is at the end of the income year a *100% subsidiary of the same company (the link company ) in the *maximum TC group; and

(b) for each company in the 2 or more subgroups, the income year ends on the same day; and

(c) the resident TC group includes every company:

(i) that is a *100% subsidiary of the link company at the end of the income year; and

(ii) that meets the conditions in subsection 820-505(3) at the end of the income year; and

(iii) for which the income year ends on that same day.

820-510(3)    
A subgroup constructed under this subsection consists of:

(a) an entity (the node entity ) that:

(i) is in the *maximum TC group; and

(ii) meets the conditions in subsection 820-505(3) at the end of the income year; and

(iii) is a *100% subsidiary of no other entity in the maximum TC group that meets those conditions at the end of the income year; and

(b) each 100% subsidiary (if any) of the node entity:

(i) that meets those conditions at the end of the income year; and

(ii) for which the income year ends on the same day as for the node entity.