Income Tax (Transitional Provisions) Act 1997

This section applies to a capital protected borrowing (including one covered by Subdivision 247‑A or section 247‑75):

entered into at or before the 2008 Budget time; and

in existence on 1 July 2013; and

to which section 247‑85 does not apply.

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 (5) on or after 1 July 2013.

If:

the capital protected borrowing is at a fixed rate for all or part of the term of the capital protected borrowing; and

that fixed rate is applicable to the capital protected borrowing for all or part of the income year that is on or after 1 July 2013;

The rate (the adjusted loan rate), at a particular time, is the sum of:

the Reserve Bank of Australia’s Indicator Lending Rate for Standard Variable Housing Loans at that time; and

100 basis points.

If:

the capital protected borrowing is at a variable rate for all or part of the term of the capital protected borrowing; and

a variable rate is applicable to the capital protected borrowing for all or part of the income year that is on or after 1 July 2013;