Document ID: chunk:federal_register_of_legislation:C2025C00120:section:16:p2
Version: federal_register_of_legislation:C2025C00120
Segment Type: section
Provision Reference: s 16 (pt 2/2)
Character Range: 71769–73555

provider) makes a deferred interest loan (in this subsection referred to as the principal loan) to another person (in this subsection referred to as the recipient):
 (a) the provider shall be deemed, at the end of:
 (i) the period of 6 months commencing on the day on which the principal loan was made; and
 (ii) each subsequent period of 6 months;
  (being in either case a period ending on or after 1 July 1986 during the whole of which the recipient is under an obligation to repay the whole or any part of the principal loan) to have made a loan (in this subsection referred to as the deemed loan) to the recipient of an amount equal to the amount by which the interest (in this subsection referred to as the accrued interest) that has accrued on the principal loan in respect of that period exceeds the amount (if any) paid in respect of the accrued interest before the end of that period;
 (b) where any part of the accrued interest becomes payable or is paid after the time when the deemed loan is deemed to have been made, the deemed loan shall be reduced accordingly; and
 (c) the deemed loan shall be deemed to have been made at a nil rate of interest.
 (4) In subsection (3), deferred interest loan means a loan in respect of which interest is payable at a rate exceeding nil, other than:
 (a) a loan where the whole of the interest is due for payment within 6 months after the loan is made; or
 (b) a loan where:
 (i) the interest is payable by instalments;
 (ii) the intervals between instalments do not exceed 6 months; and
 (iii) the first instalment is due for payment within 6 months after the loan is made.
 (5) For the purposes of this Act, where no interest is payable in respect of a loan, a nil rate of interest shall be taken to be payable in respect of the loan.