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Edited version of private ruling
Authorisation Number: 1011579035049
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Ruling
Subject: Capital gains tax (CGT) - exchange rates
Do you have to use the foreign exchange rates on the date of your acquisition to calculate the cost of your shares?
Yes.
This ruling applies for the following period:
1 July 2009 - 30 June 2010
The scheme commenced on:
1 July 2009
Relevant facts and circumstances
You acquired shares in a company after 1 July 1985.
The company was recently subject to a takeover from another company (parent company).
You were not able to take up the offer from the parent company and as a result you sold your shares to the parent company.
You have lost records in relation to the acquisition of the company's shares.
Reasons for decision
Generally, all tax-relevant amounts must be converted into Australian currency. This enables all gains and losses to be calculated using a common unit of measurement.
The particular time at which a capital asset is required to be converted into Australian currency is at the time of the relevant transaction or event.
As a result capital assets must be converted to Australian currency on the date of acquisition and the date of CGT event.
In your case, you do not have the relevant records regarding the foreign exchange rates for the acquisition of the capital asset. Therefore, you may be able to reconstruct them by obtaining public exchange rate information.
The ATO generally has this information readily available to taxpayer's but in this case, the ATO does not have foreign exchange rate information prior to 1988. However, the Reserve Bank of Australia website contains foreign exchange rates on a daily basis from 1983 to present. Therefore, see the following link to the RBA website to ascertain the appropriate foreign exchange rates.
http://www.rba.gov.au/statistics/hist-exchange-rates/
Note:
You will need to calculate the dividend reinvestment scheme transactions separately. However, due the Australian taxation system being self assessment the ATO does not require these calculations to be sent with your income tax return.
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