Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section applies to a capital protected borrowing (including one covered by Subdivision 247 - A or section 247 - 75):
(a) entered into at or before the 2008 Budget time; and
(b) in existence on 1 July 2013; and
(c) to which section 247 - 85 does not apply.
(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 (5) on or after 1 July 2013.
(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 on or after 1 July 2013;
use the rate worked out under subsection (4) 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.
(4) The rate (the adjusted loan rate ), at a particular time, is the sum of:
(a) the Reserve Bank of Australia's Indicator Lending Rate for Standard Variable Housing Loans at that time; and
(b) 100 basis points.
(5) 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 on or after 1 July 2013;
use the average of the adjusted loan rates applicable during those parts of the income year when the capital protected borrowing is at a variable rate.