Hedging financial arrangements



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The TOFA rules provide for a hedging tax-timing method that allows gains and losses from certain hedging financial arrangements to be characterised and taxed in accordance with the tax treatment of the underlying item being hedged. For example, if a valid hedging tax-timing method election is in effect, gains or losses from a hedging financial arrangement used to hedge against risks associated with a CGT asset will be treated as a capital gain or capital loss on the same basis as the capital gain or capital loss on the underlying CGT asset that is being hedged. If this applies to you, specify the amount of the gains or losses from the relevant hedging financial arrangements on the Capital gains tax (CGT) schedule 2011 (NAT 3423).

Further information

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

End of further information
Last modified: 08 Jul 2013QC 28010