Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p20
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 20/35)
Character Range: 4108689–4111237

payments in respect of the debt:
 (a) any reduction in the debt as a result of the *financed property being surrendered or returned to the creditor at the termination of the debt;
 (b) any payment to reduce the debt that is funded directly or indirectly by *non‑arm's length limited recourse debt or by proceeds from the disposal of the debtor's interest in the financed property.
However, any amounts accrued that are interest, *notional interest or in the nature of interest are taken not to be unpaid.
 (4) In working out if the debt has been paid in full, and in working out the unpaid amount of the debt, payments are to be attributed first to the payment of any accrued amounts that are interest, *notional interest or in the nature of interest.
 (5) A notional loan arising because of Division 240 (about arrangements treated as a sale and loan) is taken to be a debt that has been used to wholly or partly finance or refinance expenditure.

243‑20  What is limited recourse debt?
 (1) A limited recourse debt is an obligation imposed by law on an entity (the debtor) to pay an amount to another entity (the creditor) where the rights of the creditor as against the debtor in the event of default in payment of the debt or of interest are limited wholly or predominantly to any or all of the following:
 (a) rights (including the right to money payable) in relation to any or all of the following:
 (i) the *debt property or the use of the debt property;
 (ii) goods produced, supplied, carried, transmitted or delivered, or services provided, by means of the debt property;
 (iii) the loss or disposal of the whole or a part of the debt property or of the debtor's interest in the debt property;
 (b) rights in respect of a mortgage or other security over the debt property or other property;
 (c) rights that arise out of any *arrangement relating to the financial obligations of an end‑user of the *financed property towards the debtor, and are financial obligations in relation to the financed property.
 (2) An obligation imposed by law on an entity (the debtor) to pay an amount to another entity (the creditor) is also a limited recourse debt if it is reasonable to conclude that the rights of the creditor as against the debtor in the event of default in payment of the debt or of interest:
 (a) are capable of being limited in the way mentioned in subsection (1); or
 (b) are in substance or effect limited wholly or predominantly to rights (including the right to money payable) in relation to any or all of the following:
 (i) the