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Question 37 Non-authorised deposit taking institutions

Last updated 7 February 2022

This question requires information if you were not an authorised deposit taking institution (ADI).

If you have written code 7 or 8 (ADI) at A item 32, answer No at A.

If you were not an ADI for the income year and have written code 1, 2, 3, 4, 5, 6, 9 or 10 (non-ADI) at A item 32, answer Yes at A and complete the following.

At B, write the amount of the average value of your assets included in step 1 of the following sections if you have written:

  • code 1 or 9 at A item 32, under section 820-95
  • code 2 or 10 at A item 32, under section 820-100
  • code 3 at A item 32, under section 820-195
  • code 4 at A item 32, under section 820-200
  • code 5 at A item 32, under section 820-205
  • code 6 at A item 32, under section 820-210.

At C, write the total asset revaluation amount by which your assets have been revalued for thin capitalisation purposes for 2020–21, excluding your financial assets within the meaning of AASB 132 Financial Instruments: Presentation.

The total asset revaluation amount includes any increases in the value of assets which are recorded at fair value in your accounting records net of subsequent depreciations in 2020–21 (this asset revaluation amount must be included in the amount you write at B item 37), which is an increase in the value of your assets that:

  • gives rise to an increase in the amount of the average value of your assets, for thin capitalisation purposes, as a result of an upward revaluation in 2020–21, and
  • was not reversed in its entirety before or on the next thin capitalisation measurement day following the upward revaluation.

You would therefore include an upward revaluation that had taken place on 1 October 2020, and which has not been reversed as at the following thin capitalisation measurement day on 31 December 2020, where the 'three measurement days method' is used for 2020-21.

For example:

  • A non-ADI entity purchased a building on 1 July 2020 for $20 million. On 30 June 2021 the taxpayer revalued the building to its current fair value of $25 million and this has been included in the amount shown by the entity. The entity includes the increase of $5 million in the amount it shows at C item 37.
  • Any increase in the fair value of a mining entity’s mining rights since 2019–20 as shown in its accounting records for mining rights recorded at fair value should be included in the amount shown by the entity at C item 37.

An increase in the value of mining rights as a result of an upward revaluation must not be netted off against a decrease in the value of any other assets as a result of downward revaluation. For example, if there was an increase of $18 million in the value of your mining rights as a result of an upward revaluation and a decrease of $15 million in the value of your other assets such as land and buildings as a result of downward revaluations, you show a total asset revaluation amount of $18 million at C item 37 (not $3 million).

At D, if you have written:

  • code 1, 2, 9 or 10 at A item 32, write your safe harbour debt amount determined under section 820-95 (code 1 or 9) or section 820-100 (code 2 or 10). If you have calculated a safe harbour debt amount and relied on the arm’s length method or world-wide gearing method, write the amount you calculated for the safe harbour debt amount at D, otherwise leave this blank.
  • code 3, 4, 5, or 6 at A item 32, write your safe harbour debt amount determined under section 820-195 (code 3), section 820-200 (code 4), section 820-205 (code 5), or section 820-210 (code 6). If you have calculated a safe harbour debt amount and relied on the arm’s length method or world-wide gearing method write the amount you calculated for the safe harbour debt amount at D, otherwise leave this blank.

At E, write the amount by which your adjusted average debt written at D item 35 exceeds your maximum allowable debt determined under section 820-90 (codes 1, 2, 9 and 10) or section 820-190 (codes 3, 4, 5 and 6).

At F, write the amount of the average value of your non-debt liabilities, as defined in subsection 995-1(1), which you must subtract in determining your safe harbour debt amount as follows if you have written:

  • code 1 or 9 at A item 32, subtracted in step 6 of section 820-95
  • code 2 or 10 at A item 32, subtracted in step 6 of subsection 820-100(2)
  • code 3 at A item 32, subtracted in step 4 of section 820-195
  • code 4 at A item 32, subtracted in step 4 of subsection 820-200(2)
  • code 5 at A item 32, subtracted in step 4 of section 820-205
  • code 6 at A item 32, subtracted in step 4 of subsection 820-210(2).

At G, write the amount of the average value of your associate entity debt, within the meaning of section 820-910, which you must subtract in working out your safe harbour debt amount if you have written the following codes. Note that the associate entity threshold relating to associate entity debt for trusts and partnerships has changed.

  • code 1 or 9 at A item 32, subtracted in step 2 of section 820-95
  • code 2 or 10 at A item 32, subtracted in step 2 of subsection 820-100(2)
  • code 3 at A item 32, subtracted in step 2 of section 820-195
  • code 4 at A item 32, subtracted in step 2 of subsection 820-200(2)
  • code 5 at A item 32, subtracted in step 2 of section 820-205
  • code 6 at A item 32, subtracted in step 2 of subsection 820-210(2).

At H, write the amount of the average value of your associate entity equity, within the meaning of section 820-915, which you must subtract in working out your safe harbour debt amount if you have written the following codes. Note that the associate entity threshold relating to associate entity debt for trusts and partnerships has changed.

  • code 1 or 9 at A item 32, subtracted in step 3 of section 820-95
  • code 2 or 10 at A item 32, subtracted in step 3 of subsection 820-100(2)
  • code 3 at A item 32, subtracted in step 3 of section 820-195
  • code 4 at A item 32, subtracted in step 3 of subsection 820-200(2)
  • code 5 at A item 32, subtracted in step 3 of section 820-205
  • code 6 at A item 32, subtracted in step 3 of subsection 820-210(2).

At I, write the amount of the average value of your associate entity excess amount, within the meaning of section 820-920, which you must add in working out your safe harbour debt amount if you have written the following codes. Note that the associate entity threshold relating to associate entity debt for trusts and partnerships has changed.

  • code 1 or 9 at A item 32, added in step 8 of section 820-95
  • code 2 or 10 at A item 32, added in step 10 of subsection 820-100(2)
  • code 3 at A item 32, added in step 6 of section 820-195
  • code 4 at A item 32, added in step 8 of subsection 820-200(2)
  • code 5 at A item 32, added in step 6 of section 820-205
  • code 6 at A item 32, added in step 8 of subsection 820-210(2).

At J, write the amount of the average value of your excluded equity interests, within the meaning of section 820-946, which you must subtract in working out your safe harbour debt amount as follows if you have written:

  • code 1 or 9 at A item 32, subtracted in step 1A of section 820-95
  • code 2 or 10 at A item 32, subtracted in step 1A of subsection 820-100(2)
  • code 3 at A item 32, subtracted in step 1A of section 820-195
  • code 4 at A item 32, subtracted in step 1A of subsection 820-200(2)
  • code 5 at A item 32, subtracted in step 1A of section 820-205
  • code 6 at A item 32, subtracted in step 1A of subsection 820-210(2).

If you have written code 2, 4, 6 or 10 (financial) at A item 32, then at K write the average value of your zero capital amount, within the meaning of section 820-942, which you must subtract in working out your safe harbour debt amount as follows if you have written:

  • code 2 or 10 at A item 32, subtracted in step 7 of subsection 820-100(2)
  • code 4 at A item 32, subtracted in step 5 of subsection 820-200(2)
  • code 6 at A item 32, subtracted in step 5 of subsection 820-210(2).

If you have written code 2, 4, 6 or 10 (financial) at A item 32, then at L write the average value of your on-lent amount, as defined in subsection 995-1(1), which you must subtract in working out your safe harbour debt amount as follows if you have written:

  • code 2 or 10 at A item 32, subtracted in step 6 of subsection 820-100(3)
  • code 4 at A item 32, subtracted in step 4 of subsection 820-200(3)
  • code 6 at A item 32, subtracted in step 4 of subsection 820-210(3).

If you have written code 1,2, 9 or 10 at A item 32, then at M write the average value of all your controlled foreign entity equity, within the meaning of section 820-890, which you must subtract in working out your safe harbour debt amount as follows if you have written:

  • code 1 or 9 at A item 32, subtracted in step 5 of subsection 820-95
  • code 2 or 10 at A item 32, subtracted in step 5 of subsection 820-100(2).

If you have written code 1, 2, 9 or 10 at A item 32, then at N write the average value of all your controlled foreign entity debt, within the meaning of section 820-885, which you must subtract in working out your safe harbour debt amount as follows if you have written:

  • code 1 or 9 at A item 32, subtracted in step 4 of subsection 820-95
  • code 2 or 10 at A item 32, subtracted in step 4 of subsection 820-100(2).

Question 38 Arm's length tests

Did you rely on an arm's length debt or capital amount calculated under Division 820 of the ITAA 1997?

No

Go to Question 39.

Yes

Answer Yes at A and read on.

Write at B the arm's length debt amount or the arm's length capital amount determined under the following section.

Arm's length debt or capital amount provision

Code you wrote at A item 32

Section

1, 2, 9 or 10

820-105

3, 4, 5 or 6

820-215

7

820-315

8

820-410

Question 39 Worldwide gearing debt/capital tests

This question requires information if you have relied on the worldwide gearing debt and capital amount.

If you have written code 8 at A item 32, you do not need to complete this question. Go to Question 40.

You must answer Yes at A item 39 and complete all the applicable sub-items at item 39 if at A item 32 you wrote:

  • code 1 or 2 (outward investor (non-ADI)) at A item 32 and you rely on the worldwide gearing debt amount as calculated in subsection 820-110(1) or subsection 820-110(2)
  • code 3, 4, 5 or 6 (inward investing entities (non-ADI)) at A item 32 and you rely on the worldwide gearing debt amount as calculated in section 820-216, section 820-217, section 820-218 or section 820-219
  • code 7 (outward investing entity (ADI)) at A item 32 and you rely on the worldwide capital amount as calculated in section 820-320
  • code 9 or 10 (inward investment vehicle and is also outward investor (non-ADI)) at A item 32 and you rely on the worldwide gearing debt amount as calculated in subsection 820-111(1) or subsection 820-111(2).

If you relied on worldwide gearing debt and capital tests, answer Yes at A item 39 and complete the relevant sub-items.

If you wrote code 7 (outward investing entity (ADI)) at A item 32 write:

  • at B, the worldwide group capital ratio worked out in accordance with subsection 820-320(3) (For example, if the amount worked out under step 1 of the method statement in subsection 820-320(3) is 5.42% of the amount worked out under step 2, the decimal number you write at B is 0.05420.)
  • at C, your worldwide capital amount worked out under subsection 820-320(2).

If you wrote code 1 or 2 (outward investor (non-ADI)) at A item 32 write:

  • at D, the amount of your worldwide debt, as defined in subsection 995-1(1), used to calculate the result of step 1 in the following subsections if you wrote    
    • code 1 at A item 32, step 1 in subsection 820-110(1)
    • code 2 at A item 32, step 1 in subsection 820-110(2)
     
  • at E, the amount of your worldwide equity, as defined in subsection 995-1(1), used to calculate the result of step 1 in the following subsections if you wrote    
    • code 1 at A item 32, step 1 in subsection 820-110(1)
    • code 2 at A item 32, step 1 in subsection 820-110(2)
     
  • at F, your worldwide gearing debt amount worked out under the following subsections if you wrote    
    • code 1 at A item 32, under subsection 820-110(1)
    • code 2 at A item 32, under subsection 820-110(2).
     

If you wrote code 3, 4, 5 or 6 (inward investing entity (non-ADI)), or code 9 or 10 (inward investment vehicle which is also an outward investor (non-ADI)) at A item 32 write:

  • at D, the amount of your statement worldwide debt, as defined in subsection 995-1(1), used to calculate the result of step 1 in the following sections if you wrote    
    • code 3 at A item 32, step 1 in section 820-216
    • code 4 at A item 32, step 1 in section 820-217
    • code 5 at A item 32, step 1 in section 820-218
    • code 6 at A item 32, step 1 in section 820-219
    • code 9 at A item 32, step 1 in subsection 820-111(1)
    • code 10 at A item 32, step 1 in subsection 820-111(2)
     
  • at E, the amount of your statement worldwide equity, as defined in subsection 995-1(1), used to calculate the result of step 1 in the following sections if you wrote    
    • code 3 at A item 32, step 1 in section 820-216
    • code 4 at A item 32, step 1 in section 820-217
    • code 5 at A item 32, step 1 in section 820-218
    • code 6 at A item 32, step 1 in section 820-219
    • code 9 at A item 32, step 1 in subsection 820-111(1)
    • code 10 at A item 32, step 1 in subsection 820-111(2)
     
  • at F, your worldwide gearing debt amount worked out under the following sections if you wrote      
    • code 3 at A item 32, under section 820-216
    • code 4 at A item 32, under section 820-217
    • code 5 at A item 32, under section 820-218
    • code 6 at A item 32, under section 820-219
    • code 9 at A item 32, under subsection 820-111(1)
    • code 10 at A item 32, under subsection 820-111(2)
     
  • at G, the amount of your statement worldwide assets, as defined in subsection 995-1(1), for the purpose of applying subsection 820-90(3) if you wrote    
    • code 3 at A item 32, and have applied section 820-216
    • code 4 at A item 32, and have applied section 820-217
    • code 5 at A item 32, and have applied section 820-218
    • code 6 at A item 32, and have applied section 820-219
    • code 9 at A item 32, and have applied subsection 820-111(1)
    • code 10 at A item 32, and have applied subsection 820-111(2)
     
  • at H, the amount of your average Australian assets, as defined in subsection 995-1(1), for the purpose of applying subsection 820-90(3) if you wrote    
    • code 3 at A item 32, and have applied section 820-216
    • code 4 at A item 32, and have applied section 820-217
    • code 5 at A item 32, and have applied section 820-218
    • code 6 at A item 32, and have applied section 820-219
    • code 9 at A item 32, and have applied subsection 820-111(1)
    • code 10 at A item 32, and have applied subsection 820-111(2).
     

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