Document ID: chunk:federal_register_of_legislation:C2007A00055:clause:7_1:p2
Version: federal_register_of_legislation:C2007A00055
Segment Type: clause
Provision Reference: sch 7 cl 1 (pt 2/4)
Character Range: 62783–65440

does not apply to a *capital protected borrowing entered into on or after 1 July 2007 if:
 (a) the protected thing is a beneficial interest in:
 (i) a *share, unit or stapled security that is not listed for quotation in the official list of an *approved stock exchange; or
 (ii) an entity that holds a beneficial interest in a share, unit in a unit trust or stapled security either directly, or indirectly through one or more interposed entities, that is not so listed; and
 (b) one of these conditions is satisfied:
 (i) for a non‑listed share—the company is not a *widely held company;
 (ii) for a non‑listed unit—the trust is not a widely held unit trust as defined in section 272‑105 in Schedule 2F to the Income Tax Assessment Act 1936;
 (iii) for a non‑listed stapled security—any company involved is not a widely held company and any trust involved is not such a widely held unit trust.

247‑20  Treating capital protection as a put option

 (1) This section applies to a borrower if:
 (a) the borrower has an excess using the method statement in subsection (3) for a *capital protected borrowing entered into on or after 1 July 2007; or
 (b) the borrower has an amount that is reasonably attributable to the *capital protection as mentioned in subsection (2) for a capital protected borrowing, or an extension of a capital protected borrowing, entered into at or after 9.30 am, by legal time in the Australian Capital Territory, on 16 April 2003 and before 1 July 2007.

 (2) For paragraph (1)(b), the amount that is reasonably attributable to the *capital protection is worked out under Division 247 of the Income Tax (Transitional Provisions) Act 1997.

 (3) This is the method statement.

      Method statement
           Step 1. Work out the total amount incurred by the borrower under or in respect of the *capital protected borrowing for the income year, ignoring amounts that are not in substance for *capital protection or interest.
           Step 2. Work out the total interest that would have been incurred for the income year on a *borrowing or provision of credit of the same amount as under the *capital protected borrowing at the rate applicable under subsection (4) or (5).
           Step 3. If the step 1 amount exceeds the step 2 amount, the excess is reasonably attributable to the *capital protection for the income year.
Example: Amounts that would be ignored under step 1 include amounts that are in substance the repayment of a loan or credit, the payment of an application fee or brokerage commission and the payment of stamp duty or other tax.

 (4) If the *capital protected borrowing is at a fixed rate for all or part