Tax on Forex Gains
#1
Account Closed
Thread Starter
Joined: Jun 2005
Posts: 9,316
Tax on Forex Gains
Just to let you know the outcome of my dealings with the ATO on this question. The discussion has been partly in writing and partly in discussion with them on the telephone. I am only reporting my experience. If you do not agree with me then you should deal with the ATO directly. However, should you get a written ruling which contradicts what I have put here then I would appreciate you passing on the information.
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
If the forex gain* occurs under the old rules then it is subject to CGT rules and is assessable.
(* Note that in our discussion the ATO refers to this as a capital gain. They restrict the meaning of forex gain to be a gain under the new rules rather than a gain on a foreign exchange.)
Whether FGT or CGT applies depends on what account you transfer your money from. If it is pre July 2003 then it comes under CGT rules, if post July 2003 then it comes under FGT rules. You can also operate under the new rules (regardless of the age of your bank account) if you made a declaration before 16 Jan 2003.
It does not matter in which bank accounts the money was in when you arrived in Australia - it matters which account you transferred the money from. (Just to be clear, this is what the ATO has told me - this is not my own opinion.)
I am not advising anyone, but if I was doing the transfer now, I would set up a new (post 2003) account to transfer the money from.
I hope you all do well on the exchange rate lottery.
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
If the forex gain* occurs under the old rules then it is subject to CGT rules and is assessable.
(* Note that in our discussion the ATO refers to this as a capital gain. They restrict the meaning of forex gain to be a gain under the new rules rather than a gain on a foreign exchange.)
Whether FGT or CGT applies depends on what account you transfer your money from. If it is pre July 2003 then it comes under CGT rules, if post July 2003 then it comes under FGT rules. You can also operate under the new rules (regardless of the age of your bank account) if you made a declaration before 16 Jan 2003.
It does not matter in which bank accounts the money was in when you arrived in Australia - it matters which account you transferred the money from. (Just to be clear, this is what the ATO has told me - this is not my own opinion.)
I am not advising anyone, but if I was doing the transfer now, I would set up a new (post 2003) account to transfer the money from.
I hope you all do well on the exchange rate lottery.
#2
Lost in BE Cyberspace
Joined: Jun 2005
Location: Oz -> UK -> San Diego
Posts: 9,912
Re: Tax on Forex Gains
Thanks for updating us!
#3
Banned
Joined: Aug 2006
Location: melbourne
Posts: 2
Re: Tax on Forex Gains
Originally Posted by MartinLuther
Just to let you know the outcome of my dealings with the ATO on this question. The discussion has been partly in writing and partly in discussion with them on the telephone. I am only reporting my experience. If you do not agree with me then you should deal with the ATO directly. However, should you get a written ruling which contradicts what I have put here then I would appreciate you passing on the information.
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
If the forex gain* occurs under the old rules then it is subject to CGT rules and is assessable.
(* Note that in our discussion the ATO refers to this as a capital gain. They restrict the meaning of forex gain to be a gain under the new rules rather than a gain on a foreign exchange.)
Whether FGT or CGT applies depends on what account you transfer your money from. If it is pre July 2003 then it comes under CGT rules, if post July 2003 then it comes under FGT rules. You can also operate under the new rules (regardless of the age of your bank account) if you made a declaration before 16 Jan 2003.
It does not matter in which bank accounts the money was in when you arrived in Australia - it matters which account you transferred the money from. (Just to be clear, this is what the ATO has told me - this is not my own opinion.)
I am not advising anyone, but if I was doing the transfer now, I would set up a new (post 2003) account to transfer the money from.
I hope you all do well on the exchange rate lottery.
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
If the forex gain* occurs under the old rules then it is subject to CGT rules and is assessable.
(* Note that in our discussion the ATO refers to this as a capital gain. They restrict the meaning of forex gain to be a gain under the new rules rather than a gain on a foreign exchange.)
Whether FGT or CGT applies depends on what account you transfer your money from. If it is pre July 2003 then it comes under CGT rules, if post July 2003 then it comes under FGT rules. You can also operate under the new rules (regardless of the age of your bank account) if you made a declaration before 16 Jan 2003.
It does not matter in which bank accounts the money was in when you arrived in Australia - it matters which account you transferred the money from. (Just to be clear, this is what the ATO has told me - this is not my own opinion.)
I am not advising anyone, but if I was doing the transfer now, I would set up a new (post 2003) account to transfer the money from.
I hope you all do well on the exchange rate lottery.
The ATO tell me that as long as any exchange gain is of a private nature – in other words my own money- that it is not assessable. They never raised the question of the age of a bank account. In any case who is to know when the account was opened?
Cheers
#4
Re: Tax on Forex Gains
Originally Posted by MartinLuther
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
#5
Banned
Joined: Aug 2006
Location: melbourne
Posts: 2
Re: Tax on Forex Gains
Originally Posted by renth
I appreciate you are trying to help people but I'm pretty sure that of the bank account is opened after 1 July 2003 it might not be assessed as a capital gain but as income and therefore taxable.
Cheers
#6
Re: Tax on Forex Gains
Originally Posted by n thorne
Not if of a private nature - read the taxpack 2006.
Cheers
Cheers
It doesn't make sense to have to open a new account so as to avoid tax.
I'm about to sell my UK house, I'm also about to go and see my accountant.
Something I think MartinLuther and many others need to do.
#7
Banned
Joined: Aug 2006
Posts: 1
Re: Tax on Forex Gains
Originally Posted by MartinLuther
Just to let you know the outcome of my dealings with the ATO on this question. The discussion has been partly in writing and partly in discussion with them on the telephone. I am only reporting my experience. If you do not agree with me then you should deal with the ATO directly. However, should you get a written ruling which contradicts what I have put here then I would appreciate you passing on the information.
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
If the forex gain* occurs under the old rules then it is subject to CGT rules and is assessable.
(* Note that in our discussion the ATO refers to this as a capital gain. They restrict the meaning of forex gain to be a gain under the new rules rather than a gain on a foreign exchange.)
Whether FGT or CGT applies depends on what account you transfer your money from. If it is pre July 2003 then it comes under CGT rules, if post July 2003 then it comes under FGT rules. You can also operate under the new rules (regardless of the age of your bank account) if you made a declaration before 16 Jan 2003.
It does not matter in which bank accounts the money was in when you arrived in Australia - it matters which account you transferred the money from. (Just to be clear, this is what the ATO has told me - this is not my own opinion.)
I am not advising anyone, but if I was doing the transfer now, I would set up a new (post 2003) account to transfer the money from.
I hope you all do well on the exchange rate lottery.
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
If the forex gain* occurs under the old rules then it is subject to CGT rules and is assessable.
(* Note that in our discussion the ATO refers to this as a capital gain. They restrict the meaning of forex gain to be a gain under the new rules rather than a gain on a foreign exchange.)
Whether FGT or CGT applies depends on what account you transfer your money from. If it is pre July 2003 then it comes under CGT rules, if post July 2003 then it comes under FGT rules. You can also operate under the new rules (regardless of the age of your bank account) if you made a declaration before 16 Jan 2003.
It does not matter in which bank accounts the money was in when you arrived in Australia - it matters which account you transferred the money from. (Just to be clear, this is what the ATO has told me - this is not my own opinion.)
I am not advising anyone, but if I was doing the transfer now, I would set up a new (post 2003) account to transfer the money from.
I hope you all do well on the exchange rate lottery.
Rgds
#8
Account Closed
Thread Starter
Joined: Jun 2005
Posts: 9,316
Re: Tax on Forex Gains
Originally Posted by renth
I appreciate you are trying to help people but I'm pretty sure that of the bank account is opened after 1 July 2003 it might not be assessed as a capital gain but as income and therefore taxable.
#9
Re: Tax on Forex Gains
Originally Posted by MartinLuther
A bank account opened after 1 July 2003 comes under the FGT rules as I said above and it is treated as income. However, the ATO has stated to me (and to others) that it is not taxable if it is of a "private nature".
#10
Account Closed
Thread Starter
Joined: Jun 2005
Posts: 9,316
Re: Tax on Forex Gains
Originally Posted by renth
I will, thanks.
It doesn't make sense to have to open a new account so as to avoid tax.
I'm about to sell my UK house, I'm also about to go and see my accountant.
Something I think MartinLuther and many others need to do.
It doesn't make sense to have to open a new account so as to avoid tax.
I'm about to sell my UK house, I'm also about to go and see my accountant.
Something I think MartinLuther and many others need to do.
#11
Account Closed
Thread Starter
Joined: Jun 2005
Posts: 9,316
Re: Tax on Forex Gains
Originally Posted by renth
That's great - get it as a private ruling though, then once you've done it tell us the reference number.
The ruling itself does not mention the "private nature" bit (which was in my original question) because they ruled that I was subject to CGT. I did however follow up with them on a couple of additional questions including the "private nature" question and I've given the results of those conversations in the OP.
#12
Account Closed
Thread Starter
Joined: Jun 2005
Posts: 9,316
Re: Tax on Forex Gains
Originally Posted by n thorne
Hi
The ATO tell me that as long as any exchange gain is of a private nature – in other words my own money- that it is not assessable. They never raised the question of the age of a bank account. In any case who is to know when the account was opened?
Cheers
The ATO tell me that as long as any exchange gain is of a private nature – in other words my own money- that it is not assessable. They never raised the question of the age of a bank account. In any case who is to know when the account was opened?
Cheers
Cheers
#13
Banned
Joined: Sep 2006
Posts: 14
Re: Tax on Forex Gains
Originally Posted by MartinLuther
Just to let you know the outcome of my dealings with the ATO on this question. The discussion has been partly in writing and partly in discussion with them on the telephone. I am only reporting my experience. If you do not agree with me then you should deal with the ATO directly. However, should you get a written ruling which contradicts what I have put here then I would appreciate you passing on the information.
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
If the forex gain* occurs under the old rules then it is subject to CGT rules and is assessable.
(* Note that in our discussion the ATO refers to this as a capital gain. They restrict the meaning of forex gain to be a gain under the new rules rather than a gain on a foreign exchange.)
Whether FGT or CGT applies depends on what account you transfer your money from. If it is pre July 2003 then it comes under CGT rules, if post July 2003 then it comes under FGT rules. You can also operate under the new rules (regardless of the age of your bank account) if you made a declaration before 16 Jan 2003.
It does not matter in which bank accounts the money was in when you arrived in Australia - it matters which account you transferred the money from. (Just to be clear, this is what the ATO has told me - this is not my own opinion.)
I am not advising anyone, but if I was doing the transfer now, I would set up a new (post 2003) account to transfer the money from.
I hope you all do well on the exchange rate lottery.
If the forex gain occurs under the new rules (FGT) and is of a "private nature" then the gain is not assessable.
If the forex gain* occurs under the old rules then it is subject to CGT rules and is assessable.
(* Note that in our discussion the ATO refers to this as a capital gain. They restrict the meaning of forex gain to be a gain under the new rules rather than a gain on a foreign exchange.)
Whether FGT or CGT applies depends on what account you transfer your money from. If it is pre July 2003 then it comes under CGT rules, if post July 2003 then it comes under FGT rules. You can also operate under the new rules (regardless of the age of your bank account) if you made a declaration before 16 Jan 2003.
It does not matter in which bank accounts the money was in when you arrived in Australia - it matters which account you transferred the money from. (Just to be clear, this is what the ATO has told me - this is not my own opinion.)
I am not advising anyone, but if I was doing the transfer now, I would set up a new (post 2003) account to transfer the money from.
I hope you all do well on the exchange rate lottery.
Just one point that I do not understand is how you can make a declaration to operate under the new rules before 16 Jan 2003 when the new rules were not introduced until 1 July 2003?
Regards
#14
Re: Tax on Forex Gains
Originally Posted by renth
I will, thanks.
It doesn't make sense to have to open a new account so as to avoid tax.
I'm about to sell my UK house, I'm also about to go and see my accountant.
Something I think MartinLuther and many others need to do.
It doesn't make sense to have to open a new account so as to avoid tax.
I'm about to sell my UK house, I'm also about to go and see my accountant.
Something I think MartinLuther and many others need to do.
#15
Banned
Joined: Sep 2006
Posts: 14
Re: Tax on Forex Gains
Originally Posted by thebears
I think they should also consider the point that the activity of playing FX is to make on the deal - in which case people are making assessable income. Whether it is caught in the Capital gains arena or other income all should be wary. When in front of the ATO ignorance is no excuse. People should follow renth and see your accountants.
Regards