Tax and Superannuation Laws Amendment (2013 Measures No. 2) Act 2013 (85 of 2013)

Schedule 8   Taxation of financial arrangements

Part 4   Hedging financial arrangements method

Division 1   One in all in principle

Income Tax Assessment Act 1997

47   Section 230-385

Repeal the section, substitute:

230-385 Consequences of failure to meet requirements

When this section applies

(1) This section applies if:

(a) your *hedging financial arrangement election applies to a *hedging financial arrangement; and

(b) you do not meet a requirement of section 230-355 or 230-360 or paragraph 230-365(c) in relation to the arrangement.

(2) For the purposes of paragraph (1)(b), treat the requirement in paragraph 230-365(c) as being met even if you do not assess the hedging of the risk mentioned in that paragraph, but you can demonstrate that you intend to do so.

Commissioner may determine matter under section 230-360

(3) If:

(a) you fail to determine a matter in relation to the *hedging financial arrangement under section 230-360; or

(b) you determine a matter in relation to the arrangement under section 230-360 but the determination does not satisfy the requirements of subsection 230-360(2);

the Commissioner may determine that matter, in a way that satisfies the requirements of section 230-360. A reference in this Division to a determination made under that section is treated as including a reference to a determination under this subsection.

Election does not apply to hedging financial arrangements you start to have after failing to comply with requirements

(4) Your *hedging financial arrangement election does not apply to a *hedging financial arrangement you start to have:

(a) after you fail to meet the requirement mentioned in paragraph (1)(b) in relation to the arrangement mentioned in that paragraph; and

(b) before a date (if any) determined by the Commissioner.

(5) The Commissioner may make a determination under paragraph (4)(b) only if satisfied that you are unlikely to fail again to meet a requirement of section 230-355 or 230-360 or paragraph 230-365(c) in relation to a *hedging financial arrangement.

(6) In deciding whether to make a determination under paragraph (4)(b), the Commissioner must have regard to:

(a) your record keeping practices; and

(b) your compliance history; and

(c) any changes that have been made to:

(i) your accounting systems and controls; and

(ii) your internal governance processes;

to ensure that failures of the kind mentioned in paragraph (1)(b) do not happen again; and

(d) any other relevant matter.

Commissioner may still exercise powers under section 230-380

(7) This section does not prevent the Commissioner from exercising the Commissioner's powers under section 230-380 in relation to the *hedging financial arrangement mentioned in subsection (1).