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  • TOFA losses from financial arrangements (other than interest and foreign losses)

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    If the TOFA rules apply to the fund's financial arrangements include at L any deductible losses and any deductible TOFA transitional balancing adjustment relating to existing financial arrangements.

    Include here any TOFA losses (or part thereof) that you have not already included at:

    • Section C: Deductions - A Interest expenses within Australia
    • Section C: Deductions - B Interest expenses overseas, or
    • Section B: Income - D Net foreign income.

    If what you show at L includes an amount brought to account under the TOFA rules, also complete item 16 Taxation of financial arrangements (TOFA).

    For more information, see Guide to the taxation of financial arrangements (TOFA).

    Contribution that is a fringe benefit

    A superannuation entity can claim a deduction for an amount included in its assessable income that is a fringe benefit because it will be taxed as a fringe benefit in the hands of the contributor. The amount can be deducted in the income year in which the contribution is included in assessable income.

    A contribution made for an employee to a complying superannuation fund is not a fringe benefit.

    Return of contributions by non-complying funds

    A superannuation fund that has been non-complying since 1 July 1988, or since it was established if later, can deduct an amount which it returns to the entity which had paid the amount to it, provided the contributing entity includes the amount in its assessable income under section 290-100 of the ITAA 1997. The amount can be deducted in the income year in which it is included in the entity's assessable income.

    Deductible balancing adjustment amounts

    If the fund ceases to hold or to use a depreciating asset, it will need to calculate a balancing adjustment amount to include in its assessable income or to claim as a deduction.

    For more information, see Guide to depreciating assets 2010.

    Environmental protection activities (EPA) expenditure

    A deduction is allowed (under section 40-755 of the ITAA 1997) for certain capital expenditure incurred for the sole or dominant purpose of:

    • preventing, fighting or remedying pollution of the environment, or
    • treating, cleaning up, removing or storing waste.

    Expenditure that forms part of the cost of a depreciating asset is not deductible as expenditure on EPA if a deduction is available for the decline in value of the asset.

    For more information, see Guide to depreciating assets 2010

    Listed investment company (LIC) capital gain amount

    A LIC can pay a dividend which includes a LIC capital gain amount to a complying superannuation entity. The complying superannuation entity can claim a deduction of 33 1/3 % of that LIC capital gain amount. The LIC's dividend statement shows the LIC capital gain amount.

    A non-complying superannuation fund is not entitled to claim a deduction for the LIC capital gain amount included in any dividends paid to it by a LIC.

    Deduction relating to foreign non-assessable non-exempt income

    Certain expenses relating to foreign non-assessable non-exempt income are allowable deductions against the fund's assessable income if the expenses incurred are a cost in relation to certain debt interests (see section 25-90 of the ITAA 1997, or subsection 230-15(3) of the ITAA 1997 for a debt interest that is a financial arrangement covered by the TOFA rules). For superannuation funds, the relevant non-assessable, non-exempt income is foreign source income exempt from income tax under sections 23AI and 23AK of the ITAA 1936.

    These deductions should not be applied against D1 Gross foreign income at item 10 for the purpose of calculating D Net foreign income or a foreign loss.

    Superannuation (Financial assistance funding) Levy Act 1993

    Levies imposed by regulations under section 6 of the Superannuation (Financial Assistance Funding) Levy Act 1993 can be deducted by regulated superannuation funds and ADFs in the year in which the levy is incurred.

    Print in the Code box the code from table 6 that best describes the greatest amount written at LOther deductions.

    You cannot claim a deduction against the assessable income of the fund for benefits paid.

    There is no provision for funds to transfer or pass on deductions to other entities (for example, life insurance companies or PSTs).

    Table 6: Other deduction codes

    Code

    Other deductions in respect of:

    C

    Exclusion of personal contributions

    F

    Forex losses

    T

    TOFA gains or assessable TOFA balancing adjustment

    B

    Contribution that is a fringe benefit

    R

    Return of contributions by non-complying funds

    A

    Deductible balancing adjustment

    E

    Environmental protection activities (EPA) expenditure

    I

    LIC capital gain amount

    N

    Deduction relating to foreign non-assessable non-exempt income

    S

    Superannuation (Financial Assistance Funding) Levy Act 1993

    O

    Other deductions not listed above

    Last modified: 13 Feb 2019QC 22855