Thin capitalisation schedule

  • Where a consolidated group is formed part way through an income year, the thin capitalisation rules apply to the entities on a individual basis for the period in which they were not part of the consolidated group (unless the TC grouping rules apply under the transitional provisions). The consolidated period and the non-consolidated period are each treated as part-year periods and the thin capitalisation calculations are worked out for each period separately.
  • If the head company changes classification part way through an income year, the relevant thin capitalisation rules apply separately to each part of the income year on a part year basis. Take for example, a head company of a consolidated group with a standard income year that changes from a non-ADI inward investing entity to a non-ADI outward investing entity on 1 January. From 1 July to 31 December, the non-ADI inward investing entity rules apply. From 1 January to 30 June, the non-ADI outward investing entity rules apply.
    Last modified: 20 Oct 2010QC 17844