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-B - Realisation of forex gains or losses  

SECTION 775-40   Disposal of foreign currency or right to receive foreign currency - forex realisation event 1  

Forex realisation event 1

775-40(1)  
Forex realisation event 1 is *CGT event A1 that happens if you dispose of:


(a) *foreign currency; or


(b) a right, or a part of a right, to receive foreign currency.

Note:

For extended meaning of right to receive foreign currency , see section 775-135 .

Disposal

775-40(2)  
For the purposes of this section, use subsection 104-10(2) to work out whether you have disposed of:


(a) *foreign currency; or


(b) a right, or a part of a right, to receive foreign currency.

Note:

Under subsection 104-10(2) , a disposal requires a change of ownership.

Time of event

775-40(3)  
For the purposes of this section, subsection 104-10(3) is modified so that the time of the event is when:


(a) the *foreign currency is disposed of; or


(b) the right, or the part of the right, is disposed of. Forex realisation gain

775-40(4)  
You make a forex realisation gain if:


(a) you make a *capital gain from the event; and


(b) some or all of the capital gain is attributable to a *currency exchange rate effect.

The amount of the forex realisation gain is so much of the capital gain as is attributable to a currency exchange rate effect.

Note:

For currency exchange rate effect , see section 775-105 .

775-40(5)  
For the purposes of paragraph (4)(a), Part 3-1 is modified so that section 118-20 is disregarded in working out the *capital gain.

Note:

Section 118-20 deals with reducing capital gains if an amount is otherwise assessable.

Forex realisation loss

775-40(6)  
You make a forex realisation loss if:


(a) you make a *capital loss from the event; and


(b) some or all of the capital loss is attributable to a *currency exchange rate effect.

The amount of the forex realisation loss is so much of the capital loss as is attributable to a currency exchange rate effect.

Note:

For currency exchange rate effect , see section 775-105 .

No indexation of cost base

775-40(7)  
For the purposes of this section, disregard Division 114 .

Note:

Division 114 deals with indexation of the cost base.

Foreign currency hedging gains and losses

775-40(8)  
For the purposes of this section, disregard section 118-55 .

Note:

Section 118-55 deals with foreign currency hedging gains and losses.

Capital proceeds

775-40(9)  
For the purposes of this section, if the *capital proceeds from the event are more or less than the *market value of:


(a) the *foreign currency; or


(b) the right, or the part of the right;

the capital proceeds from the event are taken to be the market value. (The market value is worked out as at the time of the event.)


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.