INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 230 - Taxation of financial arrangements  

Subdivision 230-I - Other provisions  

SECTION 230-485   Effect of change of residence - rules for particular methods  

230-485(1)  
The object of this section is to deal with your gains and losses for an income year in which you change residence by:


(a) allocating the gains and losses to your periods of Australian and foreign residence in that income year; and


(b) determining the assessability of the gains and the deductibility of the losses according to:


(i) your residency in each period; and

(ii) the sources of the gains and the connection of the losses with your assessable income.

230-485(2)  
This section applies if:


(a) you are a foreign resident for part of an income year (the foreign residency period ) and an Australian resident for the other part of the income year (the Australian residency period ); and


(b) section 230-490 does not apply in respect of the change of residence.

Note:

See section 230-490 if you change residence, and after the change the gains and losses you make from the arrangement are not assessable or deductible under this Division.

Realisation method

230-485(3)  
Subsection (4) applies if:


(a) you have a *financial arrangement at the time (the residence change time ):


(i) you cease to be an Australian resident; or

(ii) you become an Australian resident; and


(b) you apply the realisation method to determine the amount of a gain or loss you make from the arrangement.

230-485(4)  
You are taken for the purposes of this Division:


(a) to have disposed of the arrangement just before the residence change time for its fair value just before that time; and


(b) to have acquired the arrangement again at the residence change time for its fair value at that time. Accruals and hedging financial arrangement methods

230-485(5)  
Subsection (6) applies if:


(a) assuming that you disregarded this section and subsection 230-40(2) , you would apply the accruals or hedging financial arrangement method to determine the amount of:


(i) a gain included in your assessable income under section 230-15 for the income year; or

(ii) a loss you can deduct under section 230-15 for the income year; and


(b) subsection (4) does not apply in relation to any gain or loss under the arrangement.

230-485(6)  
Apply that method by apportioning the gain or loss on a reasonable basis between those periods so as to work out:


(a) a gain or loss from the arrangement for the foreign residency period; and


(b) a gain or loss from the arrangement for the Australian residency period. Fair value, foreign exchange retranslation and financial reports methods

230-485(7)  
Subsection (8) applies if:


(a) assuming that you disregarded this section and subsection 230-40(2) , you would apply the fair value or foreign exchange retranslation method or the method of relying on your financial reports to determine the amount of:


(i) a gain included in your assessable income under section 230-15 for the income year; or

(ii) a loss you can deduct under section 230-15 for the income year; and


(b) subsection (4) does not apply in relation to any gain or loss under the arrangement.

230-485(8)  
Apply that method to work out:


(a) a gain or loss from the arrangement for the foreign residency period; and


(b) a gain or loss from the arrangement for the Australian residency period.


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