Document ID: chunk:federal_register_of_legislation:C2004A00897:clause:1_4:p3
Version: federal_register_of_legislation:C2004A00897
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 3/11)
Character Range: 21388–24114

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 year, of all the *controlled foreign entity debt of the entity.
           Step 5. Reduce the result of step 4 by the average value, for that year, of all the *controlled foreign entity equity of the entity.
           Step 6. Reduce the result of step 5 by the average value, for that year, of all the *non‑debt liabilities of the entity. If the result of this step is a negative amount, it is taken to be nil.
           Step 7. Multiply the result of step 6 by 3/4.
           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 safe harbour debt amount.
Example: AK Pty Ltd, a company that is an Australian entity, has an average value of assets (other than assets attributable to its overseas permanent establishments) of $100 million.

 The average values of its relevant associate entity debt, associate entity equity, controlled foreign entity debt, controlled foreign entity equity and non‑debt liabilities are $10 million, $8 million, $5 million, $2 million and $5 million respectively. Deducting these amounts from the result of step 1 (through the application of steps 2 to 6) leaves $70 million. Multiplying $70 million by 3/4 results in $52.5 million. As the average value of the company's associate entity excess amount is $4.5 million, the safe harbour debt amount is therefore $57 million.

820‑100  Safe harbour debt amount—outward investor (financial)

 (1) If the entity is an *outward investor (financial) for the income 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 the total debt amount.

Total debt amount

 (2) The total debt amount is the result of applying the method statement in this subsection. 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