Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:13_3:p1
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 13 cl 3 (pt 1/5)
Character Range: 188625–191366

3  After Subdivision 820‑F
Insert:

Subdivision 820‑FA—How the thin capitalisation rules apply to consolidated groups and MEC groups

Guide to Subdivision 820‑FA

820‑579  What this Subdivision is about

      This Subdivision tells you:
         • how to classify the head company of a consolidated group or MEC group (in terms of which Subdivision of this Division to apply to the head company); and
         • how to apply this Division to the head company (including how the application is modified).

Table of sections

Operative provisions

820‑581 How this Division applies to head company for income year in which group comes into existence or ceases to exist
820‑583 Classification of head company
820‑585 Exemption for consolidated group headed by foreign‑controlled Australian ADI or its holding company
820‑587 Additional application of Subdivision 820‑D to MEC group that includes foreign‑controlled Australian ADI
820‑589 How Subdivision 820‑D applies to consolidated group or MEC group
820‑591 Effect on safe harbour capital amount if group member is foreign‑controlled Australian ADI and on‑lends section 128F amounts

[This is the end of the Guide.]

Operative provisions

820‑581  How this Division applies to head company for income year in which group comes into existence or ceases to exist

  If a *consolidated group or *MEC group:
 (a) comes into existence at a time during an income year that is not the start of the income year; or
 (b) ceases to exist at a time during an income year that is not the end of the income year;
then, for each of the following periods during that income year:
 (c) a period throughout which a company is the *head company of that group; or
 (d) a period throughout which that company is the head company of a different consolidated group or MEC group; or
 (e) a period throughout which that company is a *member of no consolidated group or MEC group;
this Division (except this section) is to have either:
 (f) a single application in relation to the whole of the period; or
 (g) 2 or more applications, each in relation to a part of that period.

Example: Austco Ltd is not a member of a consolidated group for the first 6 months of an income year, but then becomes the head company of a consolidated group which continues in existence for the rest of the income year.

 For those first 6 months Austco is an outward investor (general) under section 820‑85. For the rest of the income year Austco is an outward investor (general) under subsection 820‑583(2).

 This section ensures that section 820‑120 (about part year periods) applies to Austco instead of section 820‑85, so that Subdivision 820‑B has 2 separate applications to Austco: one for the first 6 months and the other