This question aims to identify if you are subject to taxation of financial arrangements (TOFA) rules contained in Division 230 of ITAA 1997. Understanding whether you are subject to the TOFA rules and the tax timing method elections you have made will provide us with the context to understand the information you report regarding your financial arrangements.
The TOFA rules will apply to you if your aggregated turnover, financial assets or assets exceed relevant thresholds or you have otherwise made an election for the TOFA rules to apply.
If you are subject to the TOFA rules contained in Division 230 of the ITAA 1997 answer Yes at A item 20 and complete the required fields.
If you answer Yes, you must specify which (if any) of the tax timing method elections you have made to assess your gains and losses from financial arrangements, at B to F item 20. If no election was made, you should complete G. These tax timing method elections are contained in subdivisions 230-C to 230-F of the ITAA 1997.
For help working out if Division 230 of the ITAA 1997 applies to you and the relevant threshold tests, see:
- Stages 3 and 4: TOFA in Guide to the taxation of financial arrangements
- section 230-455 of the ITAA 1997.
Example
ABC Co is an authorised deposit taking institution and the TOFA rules apply to all of its financial arrangements entered into on or after 1 July 2010.
ABC Co has made elections in accordance with Division 230 of the ITAA 1997 to apply the fair value method and the foreign exchange retranslation method – general election.
With this information, ABC Co would complete question 20 as follows: