Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX

View history reference

View history note

PART 4-5 - GENERAL

View history reference

View history note

Division 820 - Thin capitalisation rules

View history reference

View history note

Subdivision 820-FA - How the thin capitalisation rules apply to consolidated groups and MEC groups

View history reference

View history note

Operative provisions

SECTION 820-591 Effect of transfer of FRT disallowed amount

View history reference

820-591(1)
This section applies if an * FRT disallowed amount is transferred under section 820-590 from the joining entity to the * head company of the joined group.

820-591(2)

View history reference

For the purposes of subsection 820-59(4) , this Act operates (except so far as the contrary intention appears) for the purposes of income years ending after the joining time as if the head company had the * FRT disallowed amount for the income year in which the joining time occurs.

820-591(3)
For the purposes of applying subsection 820-59(4) in relation to the *FRT disallowed amount, treat the disallowance year mentioned in paragraph 820-59(4)(b) as starting at the time of the transfer.

View history note

History

S 820-591 inserted by No 23 of 2024, s 3 and Sch 2 item 88, effective 1 July 2024. For application provisions, see note under s 705-60 .

Former s 820-591 repealed by No 101 of 2006, s 3 and Sch 3 item 17, effective 1 January 2008. S 820-591 formerly read:

SECTION 820-591 Effect on safe harbour capital amount if group member is foreign-controlled Australian ADI and on-lends section 128F amounts
820-591(1)
Subsection (2) has effect for the purposes of working out the *safe harbour capital amount of the *head company of a *consolidated group or of a *MEC group for a period that is all or part of an income year, if:

(a) throughout that period, a *member (the ADI subsidiary ) of the group is both a *wholly-owned 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;

unless a choice by the head company under section 820-597 covers the Australian permanent establishment in relation to some or all of that period.

Note:

The effect of such a choice is that the Australian permanent establishment is treated as part of the head company throughout the period covered by the choice. See subsection 820-603(3).

View history note

Hide history note

History

S 820-591(1) amended by No 21 of 2005.

820-591(2)
The head company ' s *risk-weighted assets at a particular time during that period 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.
View history note

Hide history note

History

S 820-591(2) amended by No 21 of 2005.

820-591(3)
To avoid doubt, a choice by the *head company under section 820-597 does not prevent subsection (2) of this section from having effect unless the choice covers the Australian permanent establishment in relation to some or all of that period.

820-591(4)
This section applies only to the 2002-2003 income year and to each of the next 3 income years.

Former s 820-591 inserted by No 117 of 2002. For application provision see Div 820 of the Income Tax (Transitional Provisions) Act 1997 .

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.