Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p7
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 7/7)
Character Range: 7148541–7150676

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).
Note: The disallowed amount also does not form part of the cost base of a CGT asset. See section 110‑54.

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 (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 *ADI equity capital of the entity (other than ADI 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