Income Tax Assessment Act 1997
CHAPTER 4
-
INTERNATIONAL ASPECTS OF INCOME TAX
PART 4-5
-
GENERAL
Division 775
-
Foreign currency gains and losses
Subdivision 775-E
-
Retranslation for qualifying forex accounts
Operative provisions
SECTION 775-285 Retranslation of gains and losses relating to a qualifying forex account - forex realisation event 8
Forex realisation event 8
775-285(1)
Forex realisation event 8 happens if:
(a) you have made a choice for retranslation for a *qualifying forex account held by you; and
(b) that choice was in effect throughout a continuous period (the retranslation period ) consisting of:
(c) either:
Retranslation amount
775-285(2)
If the amount worked out using the formula in subsection (4) is a positive amount, that amount is a positive retranslation amount for the account for the retranslation period.
775-285(3)
If the amount worked out using the formula in subsection (4) is a negative amount, that amount is a negative retranslation amount for the account for the retranslation period.
775-285(4)
Work out an amount for the account for the retranslation period using the formula:
775-285(5)
For the purposes of subsection (4), a debit balance is to be expressed as a negative amount (for example, a debit balance of $50,000 is to be expressed as − $50,000).
Forex realisation gain
775-285(6)
You make a forex realisation gain if there is a positive retranslation amount for the account for the retranslation period. The amount of the forex realisation gain is the positive retranslation amount.
Forex realisation loss
775-285(7)
You make a forex realisation loss if there is a negative retranslation amount for the account for the retranslation period. The amount of the forex realisation loss is the negative retranslation amount.
775-285(8)
For the purposes of subsection (7), reverse a negative amount (for example, a negative retranslation amount of − $50,000 will become a forex realisation loss of $50,000).
Translation of foreign currency
775-285(9)
For the purposes of the application of section 960-50 to this section:
(a) if a retranslation period for an account did not begin immediately after the end of another retranslation period for the account - the opening balance of the account for the first-mentioned retranslation period is to be translated to Australian currency at the exchange rate applicable at the start of the first-mentioned retranslation period; and
(b) if a retranslation period for an account began immediately after the end of another retranslation period for the account - the opening balance of the account for the first-mentioned retranslation period is to be translated to Australian currency at the exchange rate applicable at the end of the other retranslation period; and
(c) the closing balance of an account for a retranslation period is to be translated to Australian currency at the exchange rate applicable at the end of the retranslation period; and
(d) each deposit is to be translated to Australian currency at the exchange rate applicable at the time of the deposit; and
(e) each withdrawal is to be translated to Australian currency at the exchange rate applicable at the time of the withdrawal.
Deposits
775-285(10)
For the purposes of this section, a deposit includes any amount paid or transferred into the account.
Withdrawals
775-285(11)
For the purposes of this section, a withdrawal includes any amount paid, advanced, drawn or transferred out of the account.
View history note
Hide history noteSECTION 775-285 Retranslation of gains and losses relating to a qualifying forex account - forex realisation event 8
Forex realisation event 8
775-285(1)
Forex realisation event 8 happens if:
(a) you have made a choice for retranslation for a *qualifying forex account held by you; and
(b) that choice was in effect throughout a continuous period (the retranslation period ) consisting of:
(i) an income year; or
(ii) a particular part of an income year; and
(c) either:
(i) there is a positive retranslation amount for the account for the retranslation period (worked out under subsection (2)); or
(ii) there is a negative retranslation amount for the account for the retranslation period (worked out under subsection (3)).
Retranslation amount
775-285(2)
If the amount worked out using the formula in subsection (4) is a positive amount, that amount is a positive retranslation amount for the account for the retranslation period.
775-285(3)
If the amount worked out using the formula in subsection (4) is a negative amount, that amount is a negative retranslation amount for the account for the retranslation period.
775-285(4)
Work out an amount for the account for the retranslation period using the formula:
| Closing balance of account for the retranslation period | − | Opening balance of account for the retranslation period | − | Total deposits made to account during the retranslation period | + | Total withdrawals made from account during the retranslation period |
775-285(5)
For the purposes of subsection (4), a debit balance is to be expressed as a negative amount (for example, a debit balance of $50,000 is to be expressed as − $50,000).
Forex realisation gain
775-285(6)
You make a forex realisation gain if there is a positive retranslation amount for the account for the retranslation period. The amount of the forex realisation gain is the positive retranslation amount.
Forex realisation loss
775-285(7)
You make a forex realisation loss if there is a negative retranslation amount for the account for the retranslation period. The amount of the forex realisation loss is the negative retranslation amount.
775-285(8)
For the purposes of subsection (7), reverse a negative amount (for example, a negative retranslation amount of − $50,000 will become a forex realisation loss of $50,000).
Translation of foreign currency
775-285(9)
For the purposes of the application of section 960-50 to this section:
(a) if a retranslation period for an account did not begin immediately after the end of another retranslation period for the account - the opening balance of the account for the first-mentioned retranslation period is to be translated to Australian currency at the exchange rate applicable at the start of the first-mentioned retranslation period; and
(b) if a retranslation period for an account began immediately after the end of another retranslation period for the account - the opening balance of the account for the first-mentioned retranslation period is to be translated to Australian currency at the exchange rate applicable at the end of the other retranslation period; and
(c) the closing balance of an account for a retranslation period is to be translated to Australian currency at the exchange rate applicable at the end of the retranslation period; and
(d) each deposit is to be translated to Australian currency at the exchange rate applicable at the time of the deposit; and
(e) each withdrawal is to be translated to Australian currency at the exchange rate applicable at the time of the withdrawal.
Deposits
775-285(10)
For the purposes of this section, a deposit includes any amount paid or transferred into the account.
Withdrawals
775-285(11)
For the purposes of this section, a withdrawal includes any amount paid, advanced, drawn or transferred out of the account.
This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.