INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 230 - Taxation of financial arrangements  

Subdivision 230-G - Balancing adjustment on ceasing to have a financial arrangement  

SECTION 230-435   When balancing adjustment made  

When balancing adjustment made

230-435(1)  
A balancing adjustment is made under this Subdivision if:


(a) you transfer to another entity all of your rights and/or obligations under a *financial arrangement; or


(b) all of your rights and/or obligations under a financial arrangement otherwise cease; or


(c) you transfer to another entity:


(i) a proportionate share of all of your rights and/or obligations under a financial arrangement; or

(ii) a right or obligation that you have under a financial arrangement to a specifically identified *financial benefit; or

(iii) a proportionate share of a right or obligation that you have under a financial arrangement to a specifically identified financial benefit; or


(d) an *arrangement that is a *Division 230 financial arrangement ceases to be a financial arrangement.

230-435(2)  
Paragraphs (1)(a), (b) and (c) do not apply to a right or obligation under a *financial arrangement unless that right or obligation is one of the rights or obligations that constitute the financial arrangement.

Note:

See subsections 230-45(1) and 230-50(1) and (2) for the rights and/or obligations that constitute a financial arrangement.

Modifications for arrangements that are assets

230-435(3)  
If the *financial arrangement is an asset of yours at the time the event referred to in subsection (1) occurs, paragraphs (1)(a) and (c) do not apply unless the effect of the transfer is to transfer to the other entity substantially all the risks and rewards of ownership of the interest transferred.

230-435(4)  
If a *financial arrangement is an asset of yours, for the purposes of applying this Subdivision to the arrangement, you are treated as transferring a right under the arrangement to another entity if:


(a) you retain the right but assume a new obligation; and


(b) your assumption of the new obligation has the same effect, in substance, as transferring the right to another entity; and


(c) the new obligation arises only to the extent to which the right to *financial benefits under the arrangement is satisfied; and


(d) you cannot sell or pledge the right (other than as security in relation to the new obligation); and


(e) you must, under the new obligation, provide financial benefits you receive in relation to the right to the entity to which you owe the new obligation without delay. Historic rate rollover of derivative financial arrangement

230-435(5)  


For the purposes of paragraph (1)(b), all of your rights and/or obligations under a *financial arrangement that is a *derivative financial arrangement are taken to cease if there is an historic rate rollover of the arrangement.

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