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

    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 2015. If the SMSF came into existence during 2015–16, work out the value of its assets at 30 June 2016.

    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.
       

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

    H Total TOFA gains

    Did the SMSF have an assessable TOFA gain in 2015–16?

    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 2015–16?

    No

    Leave I blank.

    Yes

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

    Last modified: 12 Aug 2016QC 48236