INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 230 - Taxation of financial arrangements  

Subdivision 230-B - The accruals/realisation methods  

The accruals method

SECTION 230-160   Portfolio treatment of fees  

230-160(1)  
This section applies in relation to a *financial arrangement if:


(a) you have made an election under section 230-150 in an income year; and


(b) you start to have the financial arrangement in that income year or a later income year; and


(c) the financial arrangement is part of a portfolio of similar financial arrangements; and


(d) a gain or loss to which subsection 230-130(3) applies arises in part from fees in respect of the *financial arrangement; and


(e) the fees play an integral role in determining the amount of the gain or loss; and


(f) the net amount of the fees is not expected to be significant relative to an overall gain or loss from the arrangement.

230-160(2)  
For the purposes of this Division, split the gain or loss mentioned in paragraph (1)(d) as follows:


(a) to the extent that it arises from the fees, treat it as a gain or loss from the *financial arrangement (the fees gain or loss ) to which subsection 230-130(3) applies;


(b) to the extent that it does not arise from the fees, treat it as a separate gain or loss from the financial arrangement to which subsection 230-130(3) applies.

Determination of period for fees gain or loss

230-160(3)  
The period over which the fees gain or loss is to be spread is the period that you determine to be the expected life of the portfolio, if:


(a) the basis on which you determine the period accords with the spreading of the fees gain or loss for the purposes of the profit or loss statement of the financial report mentioned in paragraph 230-150(1)(a); and


(b) the basis on which you determine the period is set and recorded before any fees in respect of the *financial arrangement fall due; and


(c) the period can be justified objectively; and


(d) the period is reasonable in the circumstances. Spreading the fees gain or loss

230-160(4)  
The method by which the fees gain or loss is to be spread is the method that you determine, if:


(a) the basis on which you determine the method accords with the spreading of the fees gain or loss for the purposes of the profit or loss statement of the financial report mentioned in paragraph 230-150(1)(a); and


(b) the method is determined before any fees in respect of the *financial arrangement fall due; and


(c) the method can be justified objectively; and


(d) the method is reasonable in the circumstances.

230-160(5)  
To avoid doubt, subsections (3) and (4) apply despite sections 230-130 and 230-135.


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