Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 5/32)
Character Range: 7204792–7207449

entity (ADI) for a period that is all or part of an income year if, and only if:
 (a) apart from Part 3‑90 (about consolidation of groups) and this Subdivision, at least one *member of the group would be an *outward investing entity (ADI) for that period; or
 (b) these conditions are met:
 (i) at least one member of the group would, apart from that Part and this Subdivision, be an *outward investing financial entity (non‑ADI) for that period; and
 (ii) at least one member of the group is an *ADI throughout that period.

820‑584  Exempt special purpose entities treated as not being member of group
  While an entity meets the conditions in subsection 820‑39(3) (about insolvency‑remote special purpose entities established to manage economic risk), the entity is treated for the purposes of this Division (except this section) as not being a *member of a *consolidated group or *MEC group of which it is a member.
Note: This section has the effect that the circumstances of the entity are not taken into account in applying this Division to the head company of the group. The entity itself is exempt from this Division because of section 820‑39.

820‑585  Exemption for consolidated group headed by foreign‑controlled Australian ADI or its holding company
 (1) This Division does not disallow any of a *debt deduction for an income year if:
 (a) the debt deduction is of the *head company of a *consolidated group and the head company satisfies subsection (2) for that income year; or
 (b) the debt deduction is an amount incurred by the head company of a consolidated group during a period that is part of that income year, and the head company satisfies subsection (2) for that period.
 (2) The *head company satisfies this subsection for a period that is all or part of an income year if, throughout that period:
 (a) the head company is both a *foreign controlled Australian company and an *ADI (and would also be an ADI apart from Part 3‑90 (about consolidation of groups)); or
 (b) the head company:
 (i) is a *foreign controlled Australian company; and
 (ii) beneficially owns all the *membership interests in a *member of the group that is both a *foreign controlled Australian entity and an *ADI throughout that period; and
 (iii) would, apart from Part 3‑90 (about consolidation of groups), have no other assets and no *debt capital;
unless at least one member of the group would, apart from that Part and this Subdivision, be an *outward investing financial entity (non‑ADI) or *outward investing entity (ADI) for all or part of that period.
 (3) Subsection (1) does not apply if, at each time in the period mentioned in subsection (2), all