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
- 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 the end of the SMSF's 2022–23 income year. If the SMSF came into existence during 2023–24, work out the value of its assets at the end of its 2023 –24 income year.
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 2023–24?
- No – Leave label H blank.
- Yes – Write at label H the SMSF’s total assessable TOFA gains from financial arrangements.
I Total TOFA losses
Did the SMSF have a deductible TOFA loss in 2023–24?
- No – Leave label I blank.
- Yes – Write at label I the SMSF’s total deductible TOFA losses from financial arrangements.
Continue to: Section J: Other information
Return to: Instructions to complete your SMSF annual return 2024