This Subdivision sets out the thin capitalisation rules that apply to an entity that is an inward investing financial entity (non - ADI) for all of an income year (but not an outward investing financial entity (non - ADI) for all or any part of that year). These rules deal with the following matters:

•   how to work out the entity's maximum allowable debt for an income year;

•   how all or a part of the debt deductions claimed by the entity may be disallowed if the maximum allowable debt is exceeded;

•   how to apply these rules to a period that is less than an income year.