The new thin capitalisation rules are now in force with organisations needing to consider and apply the rules. The ATO is also releasing guidance on key matters relevant to the new rules. In this session, we provided insights into the new rules and practical issues which are emerging for many organisations in the context of property and infrastructure investments in Australia, focusing on:
- The ‘associate entity’ concept, including when entities may be regarded as ‘associate entities’ for the purposes of these rules, and how these rules differ depending on what area of these rules the distinction is being applied in the context of; and
- Applying the ‘third party debt test’ in practice, and the challenges in relying on the conduit financing rule, taking into account the terms of the legislation and the ATO guidance available.