TOFA consolidation interaction and TOFA transitional balancing adjustments amendments in Schedule 2

On 25 November 2011 the Government announced changes to the income tax law affecting consolidated groups as part of its continued commitment to maintaining the integrity, equity and fairness of the tax system. 

Exposure draft legislation and explanatory material for the proposed amendments is attached.

The proposed amendments to the taxation of financial arrangements (TOFA) consolidation interaction and TOFA transitional balancing adjustment provisions (in Schedule 2 to the exposure draft legislation) are designed to ensure that the tax treatment of financial arrangements that are part of the assets and liabilities in a consolidation/joining event is consistent with the TOFA tax timing rules.