Income Tax Assessment Act 1997
CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-10
-
FINANCIAL TRANSACTIONS
This Division does not apply to your gains and losses from a *financial arrangement for any income year to the extent that your rights and/or obligations under the arrangement are the subject of an exception under any of the following subsections.
A right or obligation arising under:
(a) an *arrangement to which Division 242 (about luxury car leases) applies; or
(b) an arrangement to which Division 240 (about arrangements treated as a sale and loan) applies; or
(c) an arrangement that relates to an asset to which Division 250 (about assets put to tax preferred use) applies; or
(d) an arrangement that, in substance or effect, depends on the use of a specific asset that is:
(e) an arrangement that is a licence to use:
A right carried by an interest in a partnership or a trust, or an obligation that corresponds to such a right, is the subject of an exception if:
(a) there is only one class of interest in the partnership or trust; or
(b) the interest is an *equity interest in the partnership or trust; or
(c) for a right or obligation relating to a trust - the trust is managed by a funds manager or custodian, or a responsible entity (as defined in the Corporations Act 2001 ) of a registered scheme (as so defined). 230-460(4)
Subsection (3) does not apply if, assuming that the *financial arrangement were a *Division 230 financial arrangement, a *fair value election, or an *election to rely on financial reports, would apply to it.
A right or obligation under a *life insurance policy is the subject of an exception unless:
(a) you are not a *life insurance company that is the insurer under the policy; and
(b) the policy is an annuity that is a *qualifying security. 230-460(6)
A right or obligation under a *general insurance policy is the subject of an exception unless:
(a) you are not a *general insurance company; and
(b) the policy is a *derivative financial arrangement. Certain workers ' compensation arrangements 230-460(7)
A right or obligation in relation to a liability for workers ' compensation claims to which Subdivision 321-C applies is the subject of an exception.
A right or obligation under a guarantee or indemnity is the subject of an exception unless:
(a) assuming that the *financial arrangement were a *Division 230 financial arrangement, it would be the subject of a *fair value election or an *election to rely on financial reports; or
(b) the financial arrangement is a *derivative financial arrangement; or
(c) the guarantee or indemnity is given in relation to a financial arrangement.
The following rights and obligations are the subject of an exception:
(a) a right to receive, or an obligation to provide, consideration for providing personal services;
(b) a right, or obligation, arising from the administration of a deceased person ' s estate;
(c) a right to receive, or an obligation to provide, a gift under a deed;
(d) a right to receive, or an obligation to provide, a *financial benefit by way of maintenance:
(e) a right to receive, or an obligation to provide, a financial benefit in relation to personal injury to an individual;
(f) a right to receive, or an obligation to provide, a financial benefit in relation to an injury to an individual ' s reputation. 230-460(10)
Without limiting paragraph (9)(e), that paragraph applies:
(a) even if the person to whom the *financial benefit is to be provided is not the individual who was injured; and
(b) even if the personal injury to the individual takes the form of:
A right to receive, or an obligation to provide, *financial benefits is the subject of an exception if the right or obligation arises from a person ' s membership of a superannuation or pension scheme, including:
(a) a right of a dependant of a member to receive financial benefits or an obligation to provide financial benefits to a dependant of a member; and
(b) a right or obligation arising from an interest in:
A right or obligation that arises under a *direct participation interest of an *attributable taxpayer in a *controlled foreign company is the subject of an exception.
A right to receive, or an obligation to provide, *financial benefits arising from the sale of:
(a) a business; or
(b) shares in a company that operates a business; or
(c) interests in a trust that operates a business;
(Repealed by No 4 of 2018)
A right to receive, or an obligation to provide, *financial benefits is the subject of an exception if:
(a) the right or obligation is the right or obligation of an *owner of a *farm management deposit; and
(b) the right or obligation relates to the deposit.
A right or obligation that arises because of a payment of an amount to which section 121EK of the Income Tax Assessment Act 1936 applies is the subject of an exception. Forestry managed investment scheme interests 230-460(17)
A right or obligation under a *forestry interest in a *forestry managed investment scheme in relation to which you can claim deductions under Division 394 is the subject of an exception. Exploration benefits 230-460(17A)
A right or obligation that arises because of the provision of an *exploration benefit under a *farm-in farm-out arrangement is the subject of an exception.
A right or obligation of a kind specified in the regulations for the purposes of this subsection is the subject of an exception.
Division 230
-
Taxation of financial arrangements
Subdivision 230-H
-
Exceptions
SECTION 230-460
Various rights and/or obligations
Rights and/or obligations subject to an exception
230-460(1)
This Division does not apply to your gains and losses from a *financial arrangement for any income year to the extent that your rights and/or obligations under the arrangement are the subject of an exception under any of the following subsections.
Note:
Further exceptions are also provided for in section 230-475 .
Leasing or property arrangement 230-460(2)A right or obligation arising under:
(a) an *arrangement to which Division 242 (about luxury car leases) applies; or
(b) an arrangement to which Division 240 (about arrangements treated as a sale and loan) applies; or
(c) an arrangement that relates to an asset to which Division 250 (about assets put to tax preferred use) applies; or
(d) an arrangement that, in substance or effect, depends on the use of a specific asset that is:
(i) real property; or
(ii) goods or a personal chattel (other than money or a *money equivalent); or
and gives a right to control the use of the asset; or
(iii) intellectual property;
(e) an arrangement that is a licence to use:
(i) real property; or
(ii) goods or a personal chattel (other than money or a money equivalent); or
(iii) intellectual property;
is the subject of an exception.
Interest in partnership or trust
230-460(3)
A right carried by an interest in a partnership or a trust, or an obligation that corresponds to such a right, is the subject of an exception if:
(a) there is only one class of interest in the partnership or trust; or
(b) the interest is an *equity interest in the partnership or trust; or
(c) for a right or obligation relating to a trust - the trust is managed by a funds manager or custodian, or a responsible entity (as defined in the Corporations Act 2001 ) of a registered scheme (as so defined). 230-460(4)
Subsection (3) does not apply if, assuming that the *financial arrangement were a *Division 230 financial arrangement, a *fair value election, or an *election to rely on financial reports, would apply to it.
Certain insurance policies
230-460(5)
A right or obligation under a *life insurance policy is the subject of an exception unless:
(a) you are not a *life insurance company that is the insurer under the policy; and
(b) the policy is an annuity that is a *qualifying security. 230-460(6)
A right or obligation under a *general insurance policy is the subject of an exception unless:
(a) you are not a *general insurance company; and
(b) the policy is a *derivative financial arrangement. Certain workers ' compensation arrangements 230-460(7)
A right or obligation in relation to a liability for workers ' compensation claims to which Subdivision 321-C applies is the subject of an exception.
Certain guarantees and indemnities
230-460(8)
A right or obligation under a guarantee or indemnity is the subject of an exception unless:
(a) assuming that the *financial arrangement were a *Division 230 financial arrangement, it would be the subject of a *fair value election or an *election to rely on financial reports; or
(b) the financial arrangement is a *derivative financial arrangement; or
(c) the guarantee or indemnity is given in relation to a financial arrangement.
Personal arrangements and personal injury
230-460(9)
The following rights and obligations are the subject of an exception:
(a) a right to receive, or an obligation to provide, consideration for providing personal services;
(b) a right, or obligation, arising from the administration of a deceased person ' s estate;
(c) a right to receive, or an obligation to provide, a gift under a deed;
(d) a right to receive, or an obligation to provide, a *financial benefit by way of maintenance:
(i) to an individual who is or has been the *spouse of the person liable to provide the benefit; or
(ii) to or for the benefit of an individual who is or has been a child of the person liable to provide the benefit; or
(iii) to or for the benefit of an individual who is or has been a child of an individual who is or has been a spouse of the person liable to provide the benefit;
(e) a right to receive, or an obligation to provide, a financial benefit in relation to personal injury to an individual;
(f) a right to receive, or an obligation to provide, a financial benefit in relation to an injury to an individual ' s reputation. 230-460(10)
Without limiting paragraph (9)(e), that paragraph applies:
(a) even if the person to whom the *financial benefit is to be provided is not the individual who was injured; and
(b) even if the personal injury to the individual takes the form of:
(i) a wrong to the individual; or
(ii) illness of the individual.
Note:
The person referred to in paragraph (a) may, for example, be a relative of the individual who was injured.
Superannuation and pension benefits 230-460(11)A right to receive, or an obligation to provide, *financial benefits is the subject of an exception if the right or obligation arises from a person ' s membership of a superannuation or pension scheme, including:
(a) a right of a dependant of a member to receive financial benefits or an obligation to provide financial benefits to a dependant of a member; and
(b) a right or obligation arising from an interest in:
(i) a *complying superannuation entity; or
(ii) a *non-complying superannuation fund or *non-complying approved deposit fund; or
(iii) an *RSA.
Interest in controlled foreign companies
230-460(12)
A right or obligation that arises under a *direct participation interest of an *attributable taxpayer in a *controlled foreign company is the subject of an exception.
Proceeds from certain business sales
230-460(13)
A right to receive, or an obligation to provide, *financial benefits arising from the sale of:
(a) a business; or
(b) shares in a company that operates a business; or
(c) interests in a trust that operates a business;
is the subject of an exception if the amounts, or the values, of those benefits are only *contingent on aspects of the economic performance of the business after the sale.
Infrastructure borrowings
230-460(14)
(Repealed by No 4 of 2018)
Farm management deposits
230-460(15)
A right to receive, or an obligation to provide, *financial benefits is the subject of an exception if:
(a) the right or obligation is the right or obligation of an *owner of a *farm management deposit; and
(b) the right or obligation relates to the deposit.
Rights and obligations to which section 121EK of the
Income Tax Assessment Act 1936
applies
230-460(16)
A right or obligation that arises because of a payment of an amount to which section 121EK of the Income Tax Assessment Act 1936 applies is the subject of an exception. Forestry managed investment scheme interests 230-460(17)
A right or obligation under a *forestry interest in a *forestry managed investment scheme in relation to which you can claim deductions under Division 394 is the subject of an exception. Exploration benefits 230-460(17A)
A right or obligation that arises because of the provision of an *exploration benefit under a *farm-in farm-out arrangement is the subject of an exception.
Regulations may provide for exceptions
230-460(18)
A right or obligation of a kind specified in the regulations for the purposes of this subsection is the subject of an exception.
This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.