Document ID: chunk:federal_register_of_legislation:C2004A00897:clause:1_4:p6
Version: federal_register_of_legislation:C2004A00897
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 6/6)
Character Range: 86743–89112

group's risk weighted assets of $160 million equals 0.0875, which is the worldwide group capital ratio.

820‑325  Amount of debt deduction disallowed

  The amount of *debt deduction disallowed under subsection 820‑300(1) is worked out using the following formula:
where:

average debt means the average value, for the income year, of all the *debt capital of the entity that gives rise to *debt deductions of the entity for that or any other income year (other than any debt capital that is attributable to any of the entity's *overseas permanent establishments).

capital shortfall means the amount by which the *adjusted average equity capital of the entity for that year (see subsection 820‑300(3)) is less than the entity's *minimum capital amount for that year.

debt deduction means each *debt deduction covered by subsection 820‑300(1).

820‑330  Application to part year periods

 (1) This subsection disallows all or a part of each *debt deduction of an entity for an income year that is an amount incurred by the entity during a period that is a part of that year (to the extent that it is not attributable to an *overseas permanent establishment of the entity) if, for that period:
 (a) the entity is an *outward investing entity (ADI); and
 (b) the *adjusted average equity capital of the entity is less than the entity's *minimum capital amount.

Note: To determine whether an entity is an outward investing entity (non‑ADI) for that period, see subsection 820‑300(2).

 (2) The entity's adjusted average equity capital for that period is:
 (a) the average value, for that period, of all the *equity capital of the entity (other than equity capital attributable to any of its *overseas permanent establishments); minus
 (b) the average value, for that period, of all the *controlled foreign entity equity of the entity (other than controlled foreign entity equity attributable to any of its overseas permanent establishments).

 (3) For the purposes of determining:
 (a) the entity's *minimum capital amount for that period; and
 (b) the amount of each *debt deduction to be disallowed;
sections 820‑305 to 820‑325 apply in relation to that entity and that period with the modifications set out in the following table:

Modifications of sections 820‑305 to 820‑325
Item                                          Provisions                   Modifications