• Section I: Taxation of financial arrangements (item 17)

    Attention

    Warning:

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

    End of attention

    Complete Section I only if the taxation of financial arrangements (TOFA) rules apply to the SMSF.

    The TOFA rules apply to an SMSF only where:

    • the value of the SMSF’s assets is $100 million or more, or
    • the SMSF has elected to have the TOFA rules apply to it.

    For the purposes of this test, work out the value of the SMSF’s assets at 30 June 2014. If the SMSF came into existence during 2014-15, work out the value of its assets at 30 June 2015.

    Once the TOFA rules apply to an SMSF, they will continue to apply to that SMSF even if later, the value of its assets falls below $100 million.

    Do the TOFA rules apply to the SMSF?

    No

    Leave Section I blank. Go to Section J.

    Yes

    Read on.

    Effect of the TOFA rules

    The TOFA rules provide for:

    • the time at which the gains and losses from financial arrangements are brought to account
    • methods for taking into account gains and losses from financial arrangements, namely      
      • accruals
      • realisation
      • fair value
      • foreign exchange retranslation
      • hedging
      • reliance on financial reports
      • balancing adjustments.
       

    Find out about:

    G Did you make a gain, loss or transitional balancing adjustment from a financial arrangement subject to the TOFA rules?

    During 2014–15, did the SMSF:

    • make an assessable gain or deductible loss under the TOFA rules (unless it was made only because the SMSF held a qualifying security), or
    • have an assessable or deductible amount from a transitional balancing adjustment, as a result of making the transitional election for existing financial arrangements?

    No

    Print X in the No box at G.

    Yes

    Print X in the Yes box at G.

    H Total TOFA gains

    Did the SMSF have an assessable TOFA gain in 2014-15?

    No

    Leave H blank.

    Yes

    Write at H the SMSF’s total assessable TOFA gains from financial arrangements.

    I Total TOFA Losses

    Did the SMSF have a deductible TOFA loss in 2014-15?

    No

    Leave I blank.

    Yes

    Write at I the SMSF’s total deductible TOFA losses from financial arrangements.

    J TOFA transitional balancing adjustment

    Did the SMSF have a TOFA transitional balancing adjustment?

    No

    Leave J blank. Go to Section J.

    Yes

    Read on.

    Write at J the SMSF’s assessable or deductible transitional balancing adjustment amount for 2014–15 as a result of making the transitional election for existing financial arrangements.

    If the transitional balancing adjustment is a deductible amount, print L in the Loss box to the right of J.

    Last modified: 15 Jan 2016QC 44344