Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 247 - Capital protected borrowings  

Subdivision 247-B - Other transitional provisions  

SECTION 247-85   Extensions and other changes  

247-85(1)    
This section applies to a capital protected borrowing entered into at or before the 2008 Budget time (including one covered by Subdivision 247-A or section 247-75 ) where, after that time, one or both of these events occurred:

(a) the term of the capital protected borrowing is extended;

(b) some other change is made to the terms and conditions of the capital protected borrowing.

247-85(2)    
Work out the amount that is reasonably attributable to the capital protection using the method statement in subsection 247-75(1) and, for step 2 in that method statement, using the rate applicable under either or both of subsections (3) and (4) from the earlier of these times:

(a) the time the extension or change took effect;

(b) the start of 1 July 2013;

(the switch-over time ).

247-85(3)    
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 that is at or after the switch-over time;

use the adjusted loan rate (as described in subsection 247-80(4) ) applicable at the first time an amount covered by step 1 of that method statement was incurred, in any income year, while the capital protected borrowing is at that fixed rate.

247-85(4)    
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 that is at or after the switch-over time;

use the average of the adjusted loan rates (as described in subsection 247-80(4) ) applicable during those parts of the income year when the capital protected borrowing is at a variable rate.