Document ID: chunk:federal_register_of_legislation:C2013C00453:clause:1_1:p1
Version: federal_register_of_legislation:C2013C00453
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 1/52)
Character Range: 4424–7300

1  Before Division 240
Insert:

Division 230—Taxation of financial arrangements

Table of Subdivisions
 Guide to Division 230
230‑A Core rules
230‑B The accruals/realisation methods
230‑C Fair value method
230‑D Foreign exchange retranslation method
230‑E Hedging financial arrangements method
230‑F Reliance on financial reports
230‑G Balancing adjustment on ceasing to have a financial arrangement
230‑H Exceptions
230‑I Other provisions
230‑J Additional operation of Division

Guide to Division 230

230‑1  What this Division is about

      This Division is about the tax treatment of gains and losses from your financial arrangements.
      You recognise the gains and losses, as appropriate, over the life of a financial arrangement and ignore distinctions between income and capital unless specific rules apply.
      If it is sufficiently certain that you will make a gain or loss, you use a compounding accruals method to recognise the gain or loss. Otherwise you use a realisation method. Instead of either, you may be able to choose to use a fair value or hedging method or to rely on your financial reports. You may also be able to choose to recognise foreign exchange gains and losses using a retranslation method.

230‑5  Scope of this Division
 (1) You have a financial arrangement if you have one or more cash settlable legal or equitable rights and/or obligations to receive or provide a financial benefit.
 (2) This Division does not apply to all financial arrangements. The main exceptions are if:
 (a) you are:
 (i) an individual; or
 (ii) a superannuation entity, managed investment scheme or an entity substantially similar to a managed investment scheme under foreign law with assets of less than $100 million; or
 (iii) an ADI, securitisation vehicle or other financial sector entity with an aggregated turnover of less than $20 million; or
 (iv) another entity with an aggregated turnover of less than $100 million, financial assets of less than $100 million and assets of less than $300 million;
  and either:
 (iv) the arrangement is to end not more than 12 months after you start to have it; or
 (v) the arrangement is not a qualifying security; or
 (b) the arrangement is a financial arrangement under section 230‑50 (equity interests etc.) and neither a fair value election, a hedging financial arrangement election nor an election to rely on financial reports applies to the arrangement.
Note: Section 230‑455 provides for the exceptions referred to in paragraph (a).

Subdivision 230‑A—Core rules

Table of sections

Objects
230‑10 Objects of this Division

Tax treatment of gains and losses from financial arrangements
230‑15 Gains are assessable and losses deductible
230‑20 Gain or loss to be taken into account only once under this Act
230‑25 Associated financial benefits to be taken into account only once under this Act
230‑30 Treatment