Document ID: chunk:federal_register_of_legislation:C2004A00897:clause:1_4:p2
Version: federal_register_of_legislation:C2004A00897
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 2/11)
Character Range: 18803–21623

the period that falls within the relevant year, the entities do not use the same *valuation days and the same number of valuation days to calculate the average value of their respective debt capital.

            The result of this step is the adjusted average debt.

Note: To calculate an average value for the purposes of this Division, see Subdivision 820‑G.

 (4) The entity's *adjusted average debt does not exceed its *maximum allowable debt if the adjusted average debt is nil or a negative amount.

820‑90  Maximum allowable debt

Entity is not also an inward investment vehicle (general) or inward investment vehicle (financial)

 (1) The entity's maximum allowable debt for an income year is the greatest of the following amounts if the entity is not also an *inward investment vehicle (general) or an *inward investment vehicle (financial) for all or any part of that year:
 (a) the *safe harbour debt amount;
 (b) the *arm's length debt amount;
 (c) the *worldwide gearing debt amount.

Note: The safe harbour debt amount and the worldwide gearing debt amount differ depending on whether the entity is an outward investor (general) or an outward investor (financial), see sections 820‑95, 820‑100 and 820‑110.

Entity is also an inward investment vehicle (general) or inward investment vehicle (financial)

 (2) The entity's maximum allowable debt for an income year is the greater of the following amounts if the entity is also an *inward investment vehicle (general) or an *inward investment vehicle (financial) for all or any part of that year:
 (a) the *safe harbour debt amount;
 (b) the *arm's length debt amount.

Note: The safe harbour debt amount differs depending on whether the entity is an outward investor (general) or an outward investor (financial), see sections 820‑95 and 820‑100.

820‑95  Safe harbour debt amount—outward investor (general)

  If the entity is an *outward investor (general) for the income year, the safe harbour debt amount is the result of applying the method statement in this section. In applying the method statement, disregard any amount that is attributable to the entity's *overseas permanent establishments.

      Method statement
           Step 1. Work out the average value, for the income year, of all the assets of the entity.
           Step 2. Reduce the result of step 1 by the average value, for that year, of all the *associate entity debt of the entity, other than associate entity debt that is *controlled foreign entity debt of the entity.
           Step 3. Reduce the result of step 2 by the average value, for that year, of all the *associate entity equity of the entity, other than associate entity equity that is *controlled foreign entity equity of the entity.
           Step 4. Reduce the result of step 3 by the average value, for that