Financial arrangements and consolidation

The Tax Laws Amendments (Taxation of Financial Arrangements) Act 2009 (TOFA), which became effective in March 2009, introduced changes with regard to taxation of gains and losses from financial arrangements. This article considers the impact of these changes, especially when entities with financial arrangements consolidate. The focus is on apportionment of gains and losses from such arrangements and determination of their tax costs upon entities joining or leaving consolidated groups.