Document ID: chunk:federal_register_of_legislation:C2025C00029:section:8:p9
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 8 (pt 9/30)
Character Range: 4184764–4187360

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 (4) and (5A).
           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:
 (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 rate worked out under subsection (5) at the first time an amount covered by step 1 of the method statement in subsection (3) was incurred, in any income year, during the term of the capital protected borrowing or that part of the term.
 (5) 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.
 (5A) 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 adjusted loan rates applicable during those parts of the income year when the capital protected borrowing is at a variable rate.
 (6) If this section applies to a borrower, this Act applies as if:
 (a) the borrower's excess from the method statement in subsection (3); or
 (b) the amount that is reasonably attributable to *capital protection as mentioned in paragraph (1)(a) or (b);
(reduced by any amount the borrower incurred under or in respect of the *capital protected borrowing for an explicit put option) were incurred only for a put option granted by the lender or by another entity under the *arrangement.

247‑25  Number of put options
 (1) If a *capital protected borrowing specifies more than one occasion on which the *capital protection can be invoked, this Act applies as if there were a separate put option for each of those occasions. So much of the amount to which subsection 247‑20(6) applies as is