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    2008 Budget announcement

    Capital protected borrowings - change to benchmark interest rate

    The Government announced that it will adjust the benchmark interest rate that applies to capital protected borrowing arrangements to increase the capital component of the overall expense, effective for arrangements entered into from 7.30pm Australian Eastern Standard Time on 13 May 2008. The new benchmark interest rate will be the Reserve Bank of Australia's indicator variable rate for standard housing loans. Interest expense in excess of that level will be treated as the cost of capital protection and not deductible if on capital account. The current law will continue to apply to existing arrangements for five years or the life of the product, whichever is shorter.

    Last modified: 04 Mar 2016QC 27923