Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 247 - Capital protected borrowings  

Subdivision 247-B - Other transitional provisions  

SECTION 247-80   Capital protected borrowings in existence on 1 July 2013  

247-80(1)    
This section applies to a capital protected borrowing (including one covered by Subdivision 247-A or section 247-75 ):

(a) entered into at or before the 2008 Budget time; and

(b) in existence on 1 July 2013; and

(c) to which section 247-85 does not apply.

247-80(2)    
Work out the amount that is reasonably attributable to the capital protection using the method statement in subsection 247-75(1) and, for step 2 in that method statement, using the rate applicable under either or both of subsections (3) and (5) on or after 1 July 2013.

247-80(3)    
If:

(a) the capital protected borrowing is at a fixed rate for all or part of the term of the capital protected borrowing; and

(b) that fixed rate is applicable to the capital protected borrowing for all or part of the income year that is on or after 1 July 2013;

use the rate worked out under subsection (4) at the first time an amount covered by step 1 of that method statement was incurred, in any income year, while the capital protected borrowing is at that fixed rate.

247-80(4)    
The rate (the adjusted loan rate ), at a particular time, is the sum of:

(a) the Reserve Bank of Australia ' s Indicator Lending Rate for Standard Variable Housing Loans at that time; and

(b) 100 basis points.

247-80(5)    
If:

(a) the capital protected borrowing is at a variable rate for all or part of the term of the capital protected borrowing; and

(b) a variable rate is applicable to the capital protected borrowing for all or part of the income year that is on or after 1 July 2013;

use the average of the adjusted loan rates applicable during those parts of the income year when the capital protected borrowing is at a variable rate.