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 775-75   Tax consequences of certain short-term forex realisation losses  

775-75(1)  
The following table has effect unless you have made a choice under section 775-80 :


Tax consequences of certain short-term forex realisation losses
Item In this case ... this is the result ...
1 you make a *forex realisation loss as a result of forex realisation event 2, and: (a) the forex realisation loss is not deductible under section 775-30; and
(a) the right to receive *foreign currency was created in return for the occurrence of a *realisation event in relation to a *CGT asset you own; and (b) CGT event K11 happens.
(b) item 6 of the table in subsection 775-45(7) applies; and
(c) the foreign currency became due for payment within 12 months after the occurrence of the realisation event
2 you make a *forex realisation loss as a result of forex realisation event 4, and: (a) the forex realisation loss is not deductible under section 775-30; and
(a) the obligation to pay *foreign currency was incurred:

    (i) in return for the acquisition of a *CGT asset; or

  (ii) as the second, third, fourth or fifth element of the *cost base of a CGT asset; and
(b) both the *cost base and the *reduced cost base of the CGT asset are increased by an amount equal to the *forex realisation loss.
(b) item 9 of the table in subsection 775-55(7) applies; and
(c) the foreign currency became due for payment within 12 months after the time when:
    (i) if subparagraph (a)(i) applies - you acquired the CGT asset (worked out under Division 109); or
  (ii) if subparagraph (a)(ii) applies - you incurred the relevant expenditure
3 you make a *forex realisation loss as a result of forex realisation event 4, and:

(a) the obligation to pay *foreign currency was incurred:

    (i) in return for your starting to hold a *depreciating asset; or

  (ii) as the second element of the cost of a depreciating asset; and

(b) if subparagraph (a)(i) applies - the foreign currency became due for payment within the 24-month period that began 12 months before the time when you began to hold the depreciating asset (worked out under Division 40); and

(c) if subparagraph (a)(ii) applies - the foreign currency became due for payment within 12 months after the time when you incurred the relevant expenditure
(a) the forex realisation loss is not deductible under section 775-30; and

(b) if:

    (i) the forex realisation event happens in the income year in which the asset ' s *start time occurs; and

  (ii) the asset is not allocated to a pool under Subdivision 40-E or 328-D;

the asset ' s *cost is increased by an amount equal to the forex realisation loss; and

(c) if:

    (i) the forex realisation event happens in an income year that is later than the one in which the asset ' s *start time occurs; and

  (ii) the asset is not allocated to a pool under Subdivision 40-E or 328-D;
the depreciating asset ' s *opening adjustable value for the income year in which the forex realisation event happens is increased by an amount equal to the forex realisation loss; and
(d) if the asset is allocated to a pool under Subdivision 40-E or 328-D - the opening pool balance of the pool for the income year in which the forex realisation event happens is increased by an amount equal to the forex realisation loss.
4 you make a *forex realisation loss as a result of forex realisation event 4, and: (a) the forex realisation loss is not deductible under section 775-30; and
(a) the obligation to pay *foreign currency was incurred as a project amount; and

(b) the foreign currency became due for payment within 12 months after the time when you incurred the project amount
(b) the pool value of the project pool for the income year in which you incurred the project amount is increased by an amount equal to the forex realisation loss.

775-75(2)  
To the extent that:


(a) section 775-30 would have allowed you a deduction for a *forex realisation loss if this section had not been enacted; and


(b) apart from this subsection, another provision of this Act would allow you a deduction for the loss;

you cannot deduct the loss under that other provision.


 

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