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Guide A: Guide to thin capitalisation

What ADI rules apply?

The following table tells you how a financial entity that has elected to apply the ADI rules is classified and which ADI rules apply.

Table 9

Type of financial entity

Classification and rules

Outward Investor - financial

Outward investing ADI. The rules in Subdivision 820-D apply.

Inward Investment vehicle - financial

Outward investing ADI. The rules in Subdivision 820-D apply.

Inward investor - financial

Inward investing ADI. The rules in Subdivision 820-E apply.

When applying Subdivision 820-E, all of the entity's business is considered to be its banking business.

Outward investor - financial and inward investment vehicle - financial

Outward investing ADI. The rules in Subdivision 820-D apply.

Legislative reference: section 820-430.

Sections within 07 Election to use the ADI rules

Last Modified: Tuesday, 8 May 2012

Table of contents

Do you need to read this publication?

Thin capitalisation schedule

01 Thin capitalisation

02 Thin capitalisation concepts

03 Control of entities

04 Entity categories

05 Applying the thin capitalisation rules to consolidated groups or MEC groups

06 Determining average values

07 Election to use the ADI rules

How is the election made?

What ADI rules apply?

Interaction with associate entity debt and associate entity equity rules

Interaction with rule about consolidated groups and MEC groups

When can an entity that has made a choice use the non-ADI rules?

08 Choice to treat specialist credit card institutions as financial entities and not ADIs

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