Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 4/10)
Character Range: 7116479–7119173

$93.75 million. Adding the zero‑capital amount of $5 million to $93.75 million results in $98.75 million. As the company does not have any associate entity excess amount, the total debt amount is therefore $98.75 million.

Adjusted on‑lent amount
 (3) The adjusted on‑lent amount is the result of applying the method statement in this subsection.

      Method statement
           Step 1. Work out the average value, for the income year, of all the assets of the entity.
           Step 1A. Reduce the result of step 1 by the average value, for that year, of all the *excluded equity interests in the entity.
           Step 2. Reduce the result of step 1A by the average value, for that year, of all the *associate entity equity of the entity.
           Step 3. Reduce the result of step 2 by the average value, for that year, of all the *non‑debt liabilities of the entity.
           Step 4. Reduce the result of step 3 by the amount (the average on‑lent amount) which is the average value, for that year, of the entity's *on‑lent amount. If the result of this step is a negative amount, it is taken to be nil.
           Step 5. Multiply the result of step 4 by 3/5.
           Step 6. Add to the result of step 5 the average on‑lent amount.
           Step 7. Reduce the result of step 6 by the average value, for that year, of all the *associate entity debt of the entity.
           Step 8. Add to the result of step 7 the average value, for that year, of the entity's *associate entity excess amount. The result of this step is the adjusted on‑lent amount.
Example: KJW Finance Pty Ltd, a company that is an Australian entity, has an average value of assets of $120 million.
 The average values of its excluded equity interests, associate entity equity, non‑debt liabilities and on‑lent amount are $5 million, $3 million, $2 million and $35 million respectively. Deducting these amounts from the result of step 1 (through applying steps 1A to 4) leaves $75 million. Multiplying $75 million by 3/5 results in $45 million. Adding the average on‑lent amount of $35 million results in $80 million. Reducing $80 million by the associate entity debt amount of $5 million results in $75 million. As the company does not have any associate entity excess amount, the adjusted on‑lent amount is therefore $75 million.

820‑210  Safe harbour debt amount—inward investor (financial)
 (1) If the entity is an *inward investor (financial) for that year, the safe harbour debt amount is the lesser of the following amounts:
 (a) the *total debt amount (worked out under subsection (2));
 (b) the *adjusted on‑lent amount (worked out under subsection (3)).
However, if the 2 amounts are equal, it is