In a media release issued on 12 January 2010, the Assistant Treasurer, Nick Sherry, has acted to confirm the intention of the Taxation of Financial Arrangements (TOFA) transitional balancing adjustment provisions, ahead of the 15 January 2010 deadline for taxpayers to decide whether to apply the TOFA Stages 3 and 4 rules to their pre-existing financial arrangements.
"An opinion has recently come to my attention that the transitional balancing adjustment provision could produce a permanent difference between the taxpayer's financial accounting profit/loss and the TOFA gain/loss from the relevant financial arrangement. This result is unintended and the Government will consider whether it is necessary to amend the income tax law to clarify the intention that there is no such permanent difference. The aim is to ensure there is no unintended advantage or detriment if a taxpayer elects to bring their pre-existing financial arrangements into the TOFA rules when relying on their financial reports.Any legislative change would have effect from the commencement of the TOFA rules," the Assistant Treasurer said.
For a copy of the Assistant Treasurer's media release, No 2010/005, 12 January 2010, go here