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INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 247.80

Capital protected borrowings in existence on 1 July 2013

  (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.

  (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.

  (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.

  (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.

  (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.


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