Document ID: chunk:federal_register_of_legislation:C2013C00453:clause:1_12:p3
Version: federal_register_of_legislation:C2013C00453
Segment Type: clause
Provision Reference: sch 1 cl 12 (pt 3/39)
Character Range: 145705–148509

the arrangement is a *qualifying security; and
 (c) you have not made an election under subsection 230‑455(7).
 (4) A *hedging financial arrangement 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.
 (5) A *hedging financial arrangement 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.

230‑335  Hedging financial arrangement and hedged item

Hedging financial arrangement
 (1) A *financial arrangement that you have that is a *derivative financial arrangement, or is not a derivative financial arrangement but is a *foreign currency hedge, is a hedging financial arrangement if:
 (a) you create, acquire or apply the arrangement for the purpose of hedging a risk or risks in relation to a *hedged item; and
 (b) at the time you create, acquire or apply the arrangement, the arrangement satisfies the requirements of the standards referred to in paragraph 230‑315(2)(a) to be a hedging instrument; and
 (c) the arrangement is recorded as a hedging instrument in:
 (i) your financial report (including documents and records on which the report is based); or
 (ii) if the arrangement hedges a risk in relation to foreign currency—the financial report of a consolidated entity in which you are included (including documents and records on which the report is based);
  for the income year in which the rights and/or obligations are created, acquired or applied.
Note: For document and record, see section 25 of the Acts Interpretation Act 1901.
 (2) If:
 (a) the *financial arrangement would not be a financial arrangement if the following provisions were disregarded:
 (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;
paragraphs (1)(b) and (c) are taken to be satisfied in relation to the arrangement.
 (3) A *financial arrangement that is a *derivative financial arrangement, or is not a derivative financial arrangement but is a *foreign currency hedge, is a hedging financial arrangement if:
 (a) you create, acquire or apply the arrangement for