Document ID: chunk:federal_register_of_legislation:C2011A00061:clause:2_12:p1
Version: federal_register_of_legislation:C2011A00061
Segment Type: clause
Provision Reference: sch 2 cl 12 (pt 1/3)
Character Range: 9129–11850

12  At the end of Division 247
Add:

Subdivision 247‑B—Other transitional provisions

Table of sections
247‑75 Post‑July 2007 capital protected borrowings
247‑80 Capital protected borrowings in existence on 1 July 2013
247‑85 Extensions and other changes

247‑75  Post‑July 2007 capital protected borrowings
 (1) For a capital protected borrowing entered into or extended:
 (a) on or after 1 July 2007; but
 (b) at or before 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 2008 (the 2008 Budget time);
work out the amount that is reasonably attributable to the capital protection using the following 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 either or both of subsections (2) and (3).
           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.
 (2) 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;
use the Reserve Bank of Australia's Indicator Lending Rate for Personal Unsecured Loans—Variable Rate (the personal unsecured loan rate) at the first time an amount covered by step 1 of the method statement in subsection (1) was incurred, in any income year, during the term of the capital protected borrowing or that part of the term.
 (3) 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;
use the average of the personal unsecured loan rates applicable during those parts of the income year when the capital protected borrowing is at a variable rate.

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