Document ID: chunk:federal_register_of_legislation:C2010C00578:clause:1_3:p1
Version: federal_register_of_legislation:C2010C00578
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 1/3)
Character Range: 14559–17325

3                                                   an *inward investment vehicle (financial)                                                                     an *outward investing entity (ADI)

 (2) The choice:
 (a) has effect accordingly, except as provided in subsection (4); and
 (b) ceases to have effect only as provided in this Subdivision; and
 (c) covers each period:
 (i) that started on or after a day specified in the choice (or on the day the choice is made if no day is specified); and
 (ii) that is all or part of an income year.

 (3) Subdivision 820‑E applies to the entity, in relation to a period for which this section treats it as an *inward investing entity (ADI), as if all the entity's *business were banking business of the entity.

 (4) The choice does not have effect for the purposes of determining whether the entity is covered by paragraph 820‑910(2)(a) (about working out the associate entity debt of another entity).

Conditions for making the choice

 (5) For the income year that is or includes the first period for which the entity would be treated in accordance with the choice, the entity must satisfy:
 (a) subsection 820‑435(1); or
 (b) subsections 820‑435(2) and (3).
Also, the entity must not have made a previous choice under this section that has ceased to have effect.

Conditions are retested every 3 years

 (6) The choice ceases to have effect, or is taken to have ceased to have effect, as appropriate, at the end of an income year covered by subsection (7) of this section, unless the entity:
 (a) satisfies subsection 820‑435(1) for that income year; or
 (b) satisfies subsections 820‑435(2) and (3) for that income year.

 (7) This subsection covers every third income year after the one referred to in subsection (5).

820‑435  Conditions

 (1) An entity satisfies this subsection for an income year if the average value, for that income year, of the entity's *on‑lent amount is at least 80% of the average value, for that income year, of all the entity's assets.

 (2) An entity satisfies this subsection for an income year if the first period that is all or part of that income year, and for which the entity would be treated in accordance with a choice under section 820‑430, consists of one or more periods, each of which is either or both of these:
 (a) a period throughout which the entity is a *financial entity because of paragraph (d) of the definition of financial entity in subsection 995‑1(1) (which covers licensed (or exempt) dealers in derivatives);
 (b) a period throughout which:
 (i) the entity is the *head company of a *consolidated group or *MEC group; and
 (ii) at least one *member of the group is a financial entity because of that paragraph.

 (3) An entity satisfies this subsection