Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p54
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 54/55)
Character Range: 3932043–3934787

this Subdivision are:
 (a) to facilitate the efficient management of financial risk by reducing after‑tax mismatches and better aligning tax treatment where hedging takes place; and
 (b) to minimise tax deferral and tax motivated practices (including tax deferral arising from such practices as tax advantaged selection from among possible hedges and inappropriate selection of tax treatment).

230‑300  Applying hedging financial arrangement method to gains and losses
 (1) If you have a *hedging financial arrangement to which a *hedging financial arrangement election applies, the gain or loss you make for an income year from the arrangement is worked out under this section and section 230‑310 instead of under Subdivision 230‑B, 230‑C, 230‑D, 230‑F or 230‑G.
 (2) Except where subsection (5) applies, the gain or loss you make from the *hedging financial arrangement is equal to the overall gain or loss you make from the arrangement.
 (3) The gain or loss you make from the *hedging financial arrangement is allocated over income years according to the determination referred to in subsection 230‑360(1).
Note 1: The allocation is capable of extending to income years after you cease to have the hedging financial arrangement (see subsection 230‑360(3)).
Note 2: The determination must be included in the record made under section 230‑355.
 (4) If the *hedging financial arrangement is a *foreign currency hedge and is a *debt interest, split a gain or loss you make from the arrangement as follows:
 (a) to the extent to which the gain or loss represents a *currency exchange rate effect attributable to the outstanding balance in relation to the debt interest, treat it as a separate gain or loss to which subsections (1) and (2) apply;
 (b) to the extent that it does not represent that effect, treat it as a separate gain or loss from the financial arrangement that is allocated under Subdivision 230‑B, 230‑F or 230‑G.
 (5) If an event listed in the table in subsection 230‑305(1) occurs:
 (a) the gain or loss you make from the *hedging financial arrangement is equal to any gain or loss that you would have made:
 (i) while the arrangement was hedging the *hedged item or items; and
 (ii) on ceasing to have the arrangement;
  if you ceased to have the arrangement for its fair value at the time of the event; and
 (b) this Division further applies as if, just after the event, you had acquired the arrangement for its fair value at the time of the event.
Despite subsection (3), the gain or loss referred to in paragraph (a) is allocated over income years according to the table.
 (7) Subsection (8) applies if the *hedging financial arrangement:
 (a) is a *financial arrangement under section 230‑50 (equity interests etc.); and