Completing the tax return for individuals where the TOFA rules apply

What are the TOFA rules?

The taxation of financial arrangements (TOFA) rules apply to financial arrangements such as bank accounts, loans, bonds and some derivatives.

The TOFA rules generally do not apply to individuals - they are mostly intended for large entities with complex financial arrangements. However, the TOFA rules will apply to individuals if they elect for this to happen.

If the TOFA rules apply to you, gains and losses made on your financial arrangements will generally be worked out under these rules, rather than other income tax laws that would have previously applied.

The TOFA rules are very complex. Once you make an election to apply the TOFA rules, you cannot revoke it. We recommend you seek professional advice before making this election.