Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p43
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 43/55)
Character Range: 3903658–3906344

(i) Division 9A of Part III of the Income Tax Assessment Act 1936 (which deals with offshore banking units);
 (ii) Part IIIB of that Act (which deals with Australian branches of foreign banks etc.); and
 (b) paragraphs (1)(b) and (c) would be satisfied in relation to the financial arrangement if the arrangement had been between 2 separate entities; and
 (c) the *fair value election is made by:
 (i) if section 121EB of the Income Tax Assessment Act 1936 applies—the OBU mentioned in that section (disregarding the operation of that section); or
 (ii) if section 160ZZW of that Act applies—the bank mentioned in that section (disregarding the operation of that section);
paragraphs (1)(b) and (c) are taken to be satisfied in relation to the arrangement.

230‑225  Financial arrangements to which election does not apply
 (1) A *fair value election does not apply to a *financial arrangement if:
 (a) the arrangement is an *equity interest; and
 (b) you are the issuer of the equity interest.
 (2) A *fair value election does not apply to a *financial arrangement if:
 (a) you are:
 (i) an individual; or
 (ii) an entity (other than an individual) that satisfies subsection 230‑455(2), (3) or (4) for the income year in which you start to have the arrangement; and
 (b) the arrangement is a *qualifying security; and
 (c) you have not made an election under subsection 230‑455(7).
 (3) A *fair value election does not apply to a *financial arrangement if:
 (a) the election is made by the *head company of a *consolidated group or *MEC group; and
 (b) the election specifies that the election is not to apply to financial arrangements in relation to *life insurance business carried on by a member of the consolidated group or MEC group; and
 (c) the arrangement is one that relates to the life insurance business carried on by a member of the consolidated group or MEC group.
 (4) A *fair value election does not apply to a *financial arrangement if the arrangement is associated with a business of a kind specified in regulations made for the purposes of this subsection.

230‑230  Applying fair value method to gains and losses
 (1) You make a gain or loss for an income year from a *financial arrangement to which a *fair value election applies if:
 (a) the principles or standards mentioned in paragraph 230‑210(2)(a) require you to recognise a gain or loss in profit or loss for the income year from the asset or liability mentioned in paragraph 230‑220(1)(c); or
 (b) in the case of an arrangement to which subsection 230‑220(2) applies—the principles or standards referred to in paragraph 230‑220(1)(c) would have required you to recognise a gain or loss in profit or loss for