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Section I: Taxation of financial arrangements (item 17)

Complete this section if the taxation of the financial arrangement provisions apply to the SMSF.

Last updated 6 August 2024

When TOFA rules apply

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 2018. If the SMSF came into existence during 2019–20, work out the value of its assets at 30 June 2021.

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 2020–21?

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 2020–21?

No

Leave I blank.

Yes

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

Continue to: Section J: Other information

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