Guide B: Guide to thin capitalisation calculations for non-ADI outward investors

Summary flowchart

This flowchart summarises the steps a non-ADI financial outward investor follows to work out whether any of its debt deductions are disallowed and the amount of the disallowed deductions. Use this flowchart to help you work through the other steps and worksheets in part 2 of this guide.

Summary flowchart

Sections within 02 Non-ADI financial outward investors

Summary flowchart
Step 1: Calculate the adjusted average debt - financial entities
Steps 2 and 3: Calculate the safe harbour debt amount - financial entities
Calculating M: The average associate entity excess amount for the total debt amount
Step 2A explanation: Calculate the associate entity excess amount - for the total debt amount
Calculating CC: The average associate entity excess amount for the adjusted on-lent amount
Step 4: Calculate the worldwide gearing debt amount - financial entities
Calculating PP: The average associate entity excess amount for the worldwide gearing debt amount
Step 5: Calculate the arm's length debt amount - financial entities
Step 6: Calculate the debt deductions disallowed - financial entities
Application to part-year periods
What to do if debt deductions are disallowed
Example - non-ADI financial outward investor

Last Modified: Thursday, 12 November 2009