• Net tainted currency exchange gains

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    A net tainted currency gain is the sum of the tainted currency exchange gains less the sum of the tainted currency exchange losses. If this is positive there is a net gain. If not, the amount is ignored.

    What is tainted currency exchange gain or loss?

    A gain or loss from a currency exchange fluctuation will be tainted unless it falls within one of the following categories:

    • the underlying transaction was for the purchase of goods from an unassociated person
    • the underlying transaction was for the purchase or sale of depreciable plant or equipment that was used mainly to produce income that is not passive, tainted sales or tainted services
    • the underlying transaction was a hedge for one of the preceding transactions
    • the CFC was carrying on business as a currency trader and no other party to the transaction was an associate or an Australian resident.
    Last modified: 05 Dec 2006QC 18000