Document ID: chunk:federal_register_of_legislation:C2025C00029:section:8:p23
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 8 (pt 23/30)
Character Range: 4217870–4220519

is the *long term bond rate for the *financial year in which the relevant *arrangement period starts.
 (2) For the purposes of section 250‑135 and Subdivisions 250‑C and 250‑D, the discount rate to be used in working out the present value of a future amount is a rate that reflects a constant periodic rate of return (worked out on a compounding basis) on the investment in:
 (a) the asset referred to in subparagraph 250‑15(d)(i) if that subparagraph applies; or
 (b) the expenditure referred to in paragraph 250‑15(d)(ii) if that subparagraph applies;
that is implicit in the *arrangements under which the asset is *put to a tax preferred use and *financial benefits are *provided in relation to that tax preferred use.

Predominant economic interest

250‑110  Predominant economic interest
  You lack a predominant economic interest in an asset at a particular time only if one or more of the following sections apply to you and the asset at that time:
 (a) section 250‑115 (limited recourse debt test);
 (b) section 250‑120 (right to acquire asset test);
 (c) section 250‑125 (effectively non‑cancellable, long term arrangement test);
 (d) section 250‑135 (level of expected financial benefits test).

250‑115  Limited recourse debt test
 (1) You lack a predominant economic interest in an asset at a particular time if more than the allowable percentage of the cost of your acquiring or constructing the asset is financed (directly or indirectly) by a *limited recourse debt or debts.
 (2) For the purposes of subsection (1):
 (a) the amount of a *limited recourse debt is to be reduced by the value of any * debt property (other than the *financed property) that is provided as security for the debt; and
 (b) if the limited recourse debt finances the acquisition or construction of 2 or more assets, only the amount of the debt that is reasonably attributable to the asset referred to in subsection (1) is to be taken into account.
 (3) For the purposes of subsection (1), the allowable percentage is:
 (a) 80% if the asset is taken to be *put to a tax preferred use because of subparagraph 250‑60(1)(b)(i) or (2)(b)(i) (end use by *tax preferred entities); or
 (b) 55% if the asset is taken to be put to a tax preferred use because of subparagraph 250‑60(1)(b)(ii) or (2)(b)(ii) (end use by foreign residents or businesses).
 (4) This section does not apply to the asset if:
 (a) you are a *corporate tax entity; and
 (b) the *tax preferred use of the asset is not the lease or hire of the asset (and is not the use of the asset under a lease or hire arrangement); and
 (c) the asset is *put to the tax preferred use wholly or principally in