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 1/9)
Character Range: 200158–203035

3                                            a partnership or trust that is not covered by item 1  the total value, as at the end of that day, of the capital and reserves of the partnership or trust; minus
                                                                                                   the value of the *debt capital of the partnership or trust that is part of the capital of the partnership or trust at the end of that day; plus
                                                                                                   the value of the debt capital of the partnership or trust at the end of that day that does not give rise to any *debt deductions of the partnership or trust for the income year or any other income year

820‑591  Effect on safe harbour capital amount if group member is foreign‑controlled Australian ADI and on‑lends section 128F amounts

 (1) Subsection (2) has effect for the purposes of working out the *safe harbour capital amount of the *head company of a *consolidated group or of a *MEC group for a period that is all or part of an income year, if:
 (a) throughout that period, a *member (the ADI subsidiary) of the group is both a *wholly‑owned subsidiary of a *foreign bank and an *ADI; and
 (b) the ADI subsidiary has:
 (i) issued *debentures covered by section 128F (which exempts interest on the debentures from withholding tax) of the Income Tax Assessment Act 1936; and
 (ii) made proceeds of the debentures available to an *Australian permanent establishment of the foreign bank, as loans to the Australian permanent establishment, for use in its Australian business;
unless a choice by the head company under section 820‑597 covers the Australian permanent establishment in relation to some or all of that period.

Note: The effect of such a choice is that the Australian permanent establishment is treated as part of the head company throughout the period covered by the choice. See subsection 820‑603(3).

 (2) The head company's *risk‑weighted assets at a particular time during that period are reduced by the total amounts of proceeds of the debentures that are at that time so made available by the ADI subsidiary.

 (3) To avoid doubt, a choice by the *head company under section 820‑597 does not prevent subsection (2) of this section from having effect unless the choice covers the Australian permanent establishment in relation to some or all of that period.

 (4) This section applies only to the 2002‑2003 income year and to each of the next 3 income years.

Subdivision 820‑FB—Grouping foreign bank branches with a consolidated group, MEC group or single Australian resident company

Guide to Subdivision 820‑FB

820‑595  What this Subdivision is about

      If the head company of a consolidated group or MEC group is a member of the same wholly‑owned group as a foreign bank, the head company can