House of Representatives

New Business Tax System (Taxation of Financial Arrangements) Bill (No. 1) 2003

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)


1 Other events are forex realisation events 6, 7, and 8.


2 For example, International Nickel Australia Ltd v FC of T 77 ATC 4383.


3 See section 118-10 of the ITAA 1997.


4 See paragraph 8-1(2)(b) of the ITAA 1997.


5 For example, section 25-90 of the ITAA 1997.


6 Taxation Rulings TR 93/27 and TR 98/1.


7 Coles Myer Finance Ltd v FC of T
93 ATC 4214 ; (1993)
25 ATR 524 .


8 Note, however, that the forex realisation loss may be integrated into the cost base of the shares, in which case there will be no unrealised loss, but no revenue forex realisation loss either; see commentary on certain short-term forex realisation losses in paragraphs 2.182 to 2.202.


9 Devaynes v Noble; Clayton's Case (1816)
35 ER 781 .


10 For the purposes of this example it is assumed that the discount expense is deductible at the time of issue of the security


11 Arthur Murray (NSW) Pty Ltd v FC of T (1965)
114 CLR 314 .


12 See Chapter 2, paragraphs 2.109 to 2.161.


13 See paragraphs 3.32 to 3.77.

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