Commonwealth Consolidated Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

INCOME TAX ASSESSMENT ACT 1997 - SECT 230.340

Generally whole arrangement must be hedging financial arrangement

             (1)  Subject to subsections (2), (3) and (4), the whole of a * financial arrangement must satisfy the requirements of subsection 230-335(1) or (3) for the arrangement to be a hedging financial arrangement .

Partial hedges

             (2)  If a * financial arrangement:

                     (a)  is an options contract; and

                     (b)  hedges risk only in part by reference to changes in the intrinsic value of the options contract;

the arrangement may be treated as a hedging financial arrangement to the extent to which the part of the arrangement referred to in paragraph (b) satisfies the requirements of subsection 230-335(1) or (3).

             (3)  If a * financial arrangement:

                     (a)  is a forward contract; and

                     (b)  has a spot price element and an interest element;

the arrangement may be treated as a hedging financial arrangement to the extent to which the spot price element satisfies the requirements of subsection 230-335(1) or (3).

Proportionate hedges

             (4)  A specified proportion of a * financial arrangement may be treated as a hedging financial arrangement to the extent to which that proportion of the arrangement satisfies the requirements of subsection 230-335(1) or (3).

Separate financial arrangements if partial or proportionate hedge

             (5)  If a part (or parts), or a proportion (or proportions), of a * financial arrangement is (or are) treated as a * hedging financial arrangement under subsection (2), (3) or (4):

                     (a)  the part (or each of the parts), or the proportion (or each of the proportions), of the arrangement that is (or are) treated as a hedging financial arrangement is taken to be a separate financial arrangement for the purposes of this Division; and

                     (b)  the remaining part or proportion (if any) of the arrangement is taken to be a separate financial arrangement for the purposes of this Division.

             (6)  Subsection (5) has effect even if there would not be separate * arrangements under subsection 230-55(4).



AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback