16Method of valuing loan benefits

16 Method of valuing loan benefits

(1) The value of a loan benefit is calculated as follows:

Step 1. Work out whether the loan is a housing loan or another type of loan.

Note For the meaning of housing loan, see clause 17.

Step 2. Work out the notional rate of interest for the loan using subclause (2).

Step 3. Work out the actual rate of interest for the loan in the relevant fringe benefits year using subclause (4).

Step 4. Work out whether the actual rate of interest exceeds the notional rate of interest.

Step 5. If the actual rate of interest is equal to or exceeds the notional rate of interest, the value of the loan benefit is nil.

Note If the value of the loan benefit is nil, the remainder of this subclause does not apply.

Step 6. If the actual rate of interest is less than the notional rate of interest, take the actual rate of interest away from the notional rate of interest.

Step 7. Work out the amount of the loan (both the principal and interest) that is outstanding in the relevant fringe benefits year using subclause (5).

Step 8. Multiply the rate of interest obtained in Step 6 and the amount obtained in Step 7: the result is the interim value of the loan.

Step 9. Work out how many complete weeks in the relevant fringe benefits year the person had, or will have, the loan: the result is the number of allowable weeks.

Step 10. Apply the formula:

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Step 11. The amount obtained by applying the formula in Step 10 is the value of the loan benefit.

Note If the recipient is a member of a couple, the value of the loan benefit is to be halved in certain circumstances (see subclause (6).

(2) The notional rate of interest for a loan is set out in the following table:

<table cellspacing="0" cellpadding="0" style="margin-left:47.62pt; border:0.75pt solid #000000; border-collapse:collapse"><thead><tr><td style="width:91.2pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableColHead" style="page-break-after:auto"><span>Fringe Benefits year</span></p></td><td colspan="2" style="width:206.3pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p class="TableColHead" style="text-align:center; page-break-after:auto"><span>Notional rate of interest</span></p></td></tr><tr><td style="width:91.2pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableColHead" style="page-break-after:auto"><span></span></p></td><td style="width:109.2pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p class="TableColHead" style="page-break-after:auto"><span>Housing loan</span></p></td><td style="width:86.3pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p class="TableColHead" style="page-break-after:auto"><span>Other loan</span></p></td></tr></thead><tbody><tr><td style="width:91.2pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">starting 1/4/93</span></p></td><td style="width:109.2pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">9.9%</span></p></td><td style="width:86.3pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">12.92%</span></p></td></tr><tr><td style="width:91.2pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">starting 1/4/94</span></p></td><td style="width:109.2pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">8.75%</span></p></td><td style="width:86.3pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">12.75%</span></p></td></tr><tr><td style="width:91.2pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">starting 1/4/95</span></p></td><td style="width:109.2pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">10.5%</span></p></td><td style="width:86.3pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">14.5%</span></p></td></tr><tr><td style="width:91.2pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">starting 1/4/96</span></p></td><td style="width:109.2pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">8.95%</span></p></td><td style="width:86.3pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">10.4%</span></p></td></tr><tr><td style="width:91.2pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">starting 1/4/97</span></p></td><td style="width:109.2pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">6.95%</span></p></td><td style="width:86.3pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p class="TableText"><span style="font-family:'Times New Roman', serif">11.75%</span></p></td></tr></tbody></table> ```