FOREX GAINS Fund income tax return instructions 2009
Sep 1st 2009, 2:59 pm
#1
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FOREX GAINS Fund income tax return instructions 2009
Can anyone ahed any light on this document?
http://www.ato.gov.au/taxprofessiona...5.htm&page=131
Fund income tax return instructions 2009
Foreign exchange (forex) gains and losses
Under the forex measures, forex gains and losses are generally brought to account as assessable income or allowable deductions, when realised. The measures cover both foreign currency denominated arrangements and, broadly, arrangements to be cash-settled in Australian currency with reference to a currency exchange rate. Some foreign exchange gains and losses of a private or domestic nature, or in relation to exempt income or non-assessable non-exempt income, are not brought to account under the forex measures.
If a forex gain or loss is brought to account under the forex measures and under another provision of the tax law, it is assessable or deductible only under the forex measures.
In general, forex gains and losses will not be assessable or deductible under these measures if they arise from certain acquisitions or disposals of capital assets, or acquisitions of depreciating assets, and the time between the acquisition or disposal and payment is no more than 12 months. Instead, any foreign exchange gain or loss is usually matched with or integrated into the tax treatment of the underlying asset.
The general translation rule requires all tax relevant amounts to be expressed in Australian currency regardless of whether there is an actual conversion of that foreign currency into Australian dollars.
The tax consequences of gains or losses on existing foreign currency assets, rights and obligations that were acquired or assumed before the commencement date (generally 1 July 2003, but this may be a later date for funds with a substituted accounting period) are generally to be determined under the law as it was before these measures came into effect, unless:
the fund has made a transitional election that brings these gains and losses within the new forex measures, or
there is an extension of an existing loan (for example, an extension by new contract or a variation to an existing contract) that brings the arrangement within these measures.
http://www.ato.gov.au/taxprofessiona...5.htm&page=131
Fund income tax return instructions 2009
Foreign exchange (forex) gains and losses
Under the forex measures, forex gains and losses are generally brought to account as assessable income or allowable deductions, when realised. The measures cover both foreign currency denominated arrangements and, broadly, arrangements to be cash-settled in Australian currency with reference to a currency exchange rate. Some foreign exchange gains and losses of a private or domestic nature, or in relation to exempt income or non-assessable non-exempt income, are not brought to account under the forex measures.
If a forex gain or loss is brought to account under the forex measures and under another provision of the tax law, it is assessable or deductible only under the forex measures.
In general, forex gains and losses will not be assessable or deductible under these measures if they arise from certain acquisitions or disposals of capital assets, or acquisitions of depreciating assets, and the time between the acquisition or disposal and payment is no more than 12 months. Instead, any foreign exchange gain or loss is usually matched with or integrated into the tax treatment of the underlying asset.
The general translation rule requires all tax relevant amounts to be expressed in Australian currency regardless of whether there is an actual conversion of that foreign currency into Australian dollars.
The tax consequences of gains or losses on existing foreign currency assets, rights and obligations that were acquired or assumed before the commencement date (generally 1 July 2003, but this may be a later date for funds with a substituted accounting period) are generally to be determined under the law as it was before these measures came into effect, unless:
the fund has made a transitional election that brings these gains and losses within the new forex measures, or
there is an extension of an existing loan (for example, an extension by new contract or a variation to an existing contract) that brings the arrangement within these measures.
Sep 1st 2009, 3:12 pm
#2
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Re: FOREX GAINS Fund income tax return instructions 2009
A couple of clippings?
http://www.aussiestockforums.com/for...ad.php?t=13840
http://law.ato.gov.au/atolaw/view.ht...2&pn=ALL:::ALL
Usually it works like this. If you are trading frequently enough, and you can show that you are set up to trade in a business like manner, with the intention of making an income from your trading activities then you might get the ATO to treat your trading activities as a source of income. The advantage here then becomes that you can deduct trading activity related expenses against this income stream.
If you are unable to convince that tax department that you are set up as above then your trades will be treated as capital gains/losses and you can only offset them against gains and losses from other such activities.
When it comes to sending money back and forth for the purposes of moving savings around or to buy things overseas I've never heard of anyone needing to pay tax on any favourable outcome they experience from doing this. It would seem pretty difficult to enforce anyhow...and it would become like a kind of tariff on imported goods.
http://www.aussiestockforums.com/for...ad.php?t=13840
http://law.ato.gov.au/atolaw/view.ht...2&pn=ALL:::ALL
Usually it works like this. If you are trading frequently enough, and you can show that you are set up to trade in a business like manner, with the intention of making an income from your trading activities then you might get the ATO to treat your trading activities as a source of income. The advantage here then becomes that you can deduct trading activity related expenses against this income stream.
If you are unable to convince that tax department that you are set up as above then your trades will be treated as capital gains/losses and you can only offset them against gains and losses from other such activities.
When it comes to sending money back and forth for the purposes of moving savings around or to buy things overseas I've never heard of anyone needing to pay tax on any favourable outcome they experience from doing this. It would seem pretty difficult to enforce anyhow...and it would become like a kind of tariff on imported goods.
Last edited by Sooty and Sweep; Sep 1st 2009 at 3:14 pm.
Sep 2nd 2009, 11:25 am
#3
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Posts: 375
Re: FOREX GAINS Fund income tax return instructions 2009
Can anyone ahed any light on this document?
http://www.ato.gov.au/taxprofessiona...5.htm&page=131
Fund income tax return instructions 2009
Foreign exchange (forex) gains and losses
Some foreign exchange gains and losses of a private or domestic nature, or in relation to exempt income or non-assessable non-exempt income, are not brought to account under the forex measures.
http://www.ato.gov.au/taxprofessiona...5.htm&page=131
Fund income tax return instructions 2009
Foreign exchange (forex) gains and losses
Some foreign exchange gains and losses of a private or domestic nature, or in relation to exempt income or non-assessable non-exempt income, are not brought to account under the forex measures.
Has anyone, any idea whether this is a new ruling/published paper regarding private forex transactions, with regards to gains made after permanent residency?
Sooty
Sep 2nd 2009, 12:54 pm
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Re: FOREX GAINS Fund income tax return instructions 2009
Sep 5th 2009, 1:34 pm
#5
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Re: FOREX GAINS Fund income tax return instructions 2009
Sep 7th 2009, 4:23 am
#8
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Re: FOREX GAINS Fund income tax return instructions 2009
Hi,
If you can point out to me where it states gains made by transfering you cash over to Australian dollars when emigrating AFTER you obtain or are seen to take up permanent residency in Australia?
Well you are a better than man than me!
http://www.ato.gov.au/content/downlo...2n41510608.pdf
Page 21.
CGT AND FOREIGN EXCHANGE
GAINS AND LOSSES
A CGT asset can be denominated in a foreign currency
and foreign currency cash itself can be a CGT asset.
Gains or losses that you make during the period that
you hold such assets will generally be taxed as a capital
gain or capital loss respectively. However, if dealings with
foreign currency denominated assets give rise to rights to
receive or obligations to pay foreign currency, the rights or
obligations may be subject to the foreign exchange (forex)
provisions when a right or obligation ceases. For example,
if a contract you enter into to sell an overseas rental
property is denominated in foreign currency, you will have a
right to receive foreign currency (being the sale price of the
rental property). The right ceases on payment of the foreign
currency. Such rights and obligations will usually arise on
the acquisition or disposal of a CGT asset.
A forex gain or loss commonly arises in relation to the
acquisition or disposal of a CGT asset denominated in
foreign currency where there is a currency exchange rate
fluctuation between the date you entered into the contract
and the date of settlement of the contract (when payment
occurs). Currency fluctuations between the date of
acquisition and date of disposal of a CGT asset are taken
into account when the cost base and capital proceeds are
translated into Australian currency.
It may be that the gain or loss you make on the ending of
rights in relation to foreign currency, a disposal of foreign
currency or a right to receive foreign currency is taxable
under both CGT and the forex measures. Generally, to
the extent that both the forex measures and CGT bring
to account a forex gain or loss, the forex measures take
precedence, such that the forex gain or loss is brought to
account only under the forex provisions.
For more information, see the publication Foreign exchange
(forex): overview available only on our website.
Short-term foreign exchange gains and
losses rules
Some short-term foreign exchange (forex) gains or losses,
which arise under transactions for the acquisition or
disposal of certain CGT assets, will be treated as capital
gains or capital losses. In such cases, CGT events K10 or
K11 will happen, which will result in the forex gain or loss
being integrated into the tax treatment of the CGT asset,
or matched to the character of the gain or loss that would
arise from the disposal of the asset. For the short-term
rules to apply, the due date for payment must be within
12 months of acquiring or disposing of the asset. For more
information, see Forex: the 12 month rule (NAT 9391) on
our website.
Translating (converting) foreign currency
denominated CGT assets to Australian dollars
For information on what exchange rates to use in
translating foreign currency amounts into Australian
currency, see Foreign exchange (forex): the general
translation rule (NAT 9339) on our website.
Examples of application of
forex rules to CGT assets
For examples of the application of the forex rules to
acquisitions and disposals of foreign currency denominated
CGT assets, see the following fact sheets on our website:
■ Foreign exchange (forex): acquisition of a CGT asset
(NAT 10557)
■ Foreign exchange (forex): acquisition of a CGT asset
(election out of 12 month rule) (NAT 10625)
■ Foreign exchange (forex): disposal of CGT asset
denominated in foreign currency – incidental costs
(election out of 12 month rule) (NAT 10627)
■ Foreign exchange (forex): disposal price of CGT asset
denominated in foreign currency (NAT 10628)
■ Foreign exchange (forex): disposal price of CGT asset
denominated in foreign currency (election out of
12 month rule) (NAT 10654).
CGT AND DEPRECIATING ASSETS
Under the uniform capital allowance (UCA) system,
a capital gain or capital loss from the disposal of a
depreciating asset will only arise to the extent that you have
used the asset for a non-taxable purpose (for example,
used for private purposes).
You calculate a capital gain or capital loss from a
depreciating asset used for a non-taxable purpose using
the UCA concepts of cost and termination value, not the
concepts of capital proceeds and cost base found in the
CGT provisions.
If a balancing adjustment event occurs for a depreciating
asset that you have at some time used for a non-taxable
purpose, a CGT event happens (see CGT event K7 in
table 1.11, appendix 1). The most common balancing
adjustment event for a depreciating asset occurs when you
stop holding it (for example, you sell, lose or destroy it) or
stop using it.
Calculating a capital gain or capital loss
for a depreciating asset
You make a capital gain if the termination value of your
depreciating asset is greater than its cost. You make a
capital loss if the reverse is the case – the asset’s cost is
more than its termination value.
You use different formulas to calculate a capital gain or
capital loss depending on whether the asset is in a lowvalue
pool or not.
If you can point out to me where it states gains made by transfering you cash over to Australian dollars when emigrating AFTER you obtain or are seen to take up permanent residency in Australia?
Well you are a better than man than me!
http://www.ato.gov.au/content/downlo...2n41510608.pdf
Page 21.
CGT AND FOREIGN EXCHANGE
GAINS AND LOSSES
A CGT asset can be denominated in a foreign currency
and foreign currency cash itself can be a CGT asset.
Gains or losses that you make during the period that
you hold such assets will generally be taxed as a capital
gain or capital loss respectively. However, if dealings with
foreign currency denominated assets give rise to rights to
receive or obligations to pay foreign currency, the rights or
obligations may be subject to the foreign exchange (forex)
provisions when a right or obligation ceases. For example,
if a contract you enter into to sell an overseas rental
property is denominated in foreign currency, you will have a
right to receive foreign currency (being the sale price of the
rental property). The right ceases on payment of the foreign
currency. Such rights and obligations will usually arise on
the acquisition or disposal of a CGT asset.
A forex gain or loss commonly arises in relation to the
acquisition or disposal of a CGT asset denominated in
foreign currency where there is a currency exchange rate
fluctuation between the date you entered into the contract
and the date of settlement of the contract (when payment
occurs). Currency fluctuations between the date of
acquisition and date of disposal of a CGT asset are taken
into account when the cost base and capital proceeds are
translated into Australian currency.
It may be that the gain or loss you make on the ending of
rights in relation to foreign currency, a disposal of foreign
currency or a right to receive foreign currency is taxable
under both CGT and the forex measures. Generally, to
the extent that both the forex measures and CGT bring
to account a forex gain or loss, the forex measures take
precedence, such that the forex gain or loss is brought to
account only under the forex provisions.
For more information, see the publication Foreign exchange
(forex): overview available only on our website.
Short-term foreign exchange gains and
losses rules
Some short-term foreign exchange (forex) gains or losses,
which arise under transactions for the acquisition or
disposal of certain CGT assets, will be treated as capital
gains or capital losses. In such cases, CGT events K10 or
K11 will happen, which will result in the forex gain or loss
being integrated into the tax treatment of the CGT asset,
or matched to the character of the gain or loss that would
arise from the disposal of the asset. For the short-term
rules to apply, the due date for payment must be within
12 months of acquiring or disposing of the asset. For more
information, see Forex: the 12 month rule (NAT 9391) on
our website.
Translating (converting) foreign currency
denominated CGT assets to Australian dollars
For information on what exchange rates to use in
translating foreign currency amounts into Australian
currency, see Foreign exchange (forex): the general
translation rule (NAT 9339) on our website.
Examples of application of
forex rules to CGT assets
For examples of the application of the forex rules to
acquisitions and disposals of foreign currency denominated
CGT assets, see the following fact sheets on our website:
■ Foreign exchange (forex): acquisition of a CGT asset
(NAT 10557)
■ Foreign exchange (forex): acquisition of a CGT asset
(election out of 12 month rule) (NAT 10625)
■ Foreign exchange (forex): disposal of CGT asset
denominated in foreign currency – incidental costs
(election out of 12 month rule) (NAT 10627)
■ Foreign exchange (forex): disposal price of CGT asset
denominated in foreign currency (NAT 10628)
■ Foreign exchange (forex): disposal price of CGT asset
denominated in foreign currency (election out of
12 month rule) (NAT 10654).
CGT AND DEPRECIATING ASSETS
Under the uniform capital allowance (UCA) system,
a capital gain or capital loss from the disposal of a
depreciating asset will only arise to the extent that you have
used the asset for a non-taxable purpose (for example,
used for private purposes).
You calculate a capital gain or capital loss from a
depreciating asset used for a non-taxable purpose using
the UCA concepts of cost and termination value, not the
concepts of capital proceeds and cost base found in the
CGT provisions.
If a balancing adjustment event occurs for a depreciating
asset that you have at some time used for a non-taxable
purpose, a CGT event happens (see CGT event K7 in
table 1.11, appendix 1). The most common balancing
adjustment event for a depreciating asset occurs when you
stop holding it (for example, you sell, lose or destroy it) or
stop using it.
Calculating a capital gain or capital loss
for a depreciating asset
You make a capital gain if the termination value of your
depreciating asset is greater than its cost. You make a
capital loss if the reverse is the case – the asset’s cost is
more than its termination value.
You use different formulas to calculate a capital gain or
capital loss depending on whether the asset is in a lowvalue
pool or not.
Sep 7th 2009, 5:21 am
#9
(It's not my real name)
Joined: Sep 2002
Location: Ilukapool. WA
Posts: 12,467
Re: FOREX GAINS Fund income tax return instructions 2009
Hi,
If you can point out to me where it states gains made by transfering you cash over to Australian dollars when emigrating AFTER you obtain or are seen to take up permanent residency in Australia?
Well you are a better than man than me!
http://www.ato.gov.au/content/downlo...2n41510608.pdf
If you can point out to me where it states gains made by transfering you cash over to Australian dollars when emigrating AFTER you obtain or are seen to take up permanent residency in Australia?
Well you are a better than man than me!
http://www.ato.gov.au/content/downlo...2n41510608.pdf
Here is an interesting piece of information:
http://www.gomatilda.com/news/article.cfm?articleid=327
Sep 7th 2009, 11:57 am
#10
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Joined: Aug 2007
Posts: 375
Re: FOREX GAINS Fund income tax return instructions 2009
Which is why you ought to get an accountant that specialises in this kind of thing.
Here is an interesting piece of information:
http://www.gomatilda.com/news/article.cfm?articleid=327
Here is an interesting piece of information:
http://www.gomatilda.com/news/article.cfm?articleid=327
On every £100k, you could be looking at a $60k gain at 2.5, i am going for a hearing before i send anything over. If there is any truth in it, i shall make a permanent entry again in the future. Return to the UK for a year, then return when the rate is more acceptable as a PR. I have three years, a year in Oz, return to the UK for a year, then return to Oz again as a PR, second entry, better rate in three years hopefully!
Sooty
Sep 7th 2009, 1:55 pm
#11
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Joined: Nov 2004
Location: Murrumbeena, Melbourne
Posts: 380
Re: FOREX GAINS Fund income tax return instructions 2009
Thanks Renth,
On every £100k, you could be looking at a $60k gain at 2.5, i am going for a hearing before i send anything over. If there is any truth in it, i shall make a permanent entry again in the future. Return to the UK for a year, then return when the rate is more acceptable as a PR. I have three years, a year in Oz, return to the UK for a year, then return to Oz again as a PR, second entry, better rate in three years hopefully!
Sooty
On every £100k, you could be looking at a $60k gain at 2.5, i am going for a hearing before i send anything over. If there is any truth in it, i shall make a permanent entry again in the future. Return to the UK for a year, then return when the rate is more acceptable as a PR. I have three years, a year in Oz, return to the UK for a year, then return to Oz again as a PR, second entry, better rate in three years hopefully!
Sooty
Yes I missed out on the October spike but I wasn't sure what was going to happen then & at least I have now bagged a decent job.
Whether the job works out, whether life in Melbourne works out remains to be seen!?
I will know alot more in October 2010, until then just going to play it by ear!
Sep 7th 2009, 9:54 pm
#12
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Joined: Aug 2007
Posts: 375
Re: FOREX GAINS Fund income tax return instructions 2009
I will let you know how i get on, but we have discussed tonight, we are going to wait, cancel, just too expensive, its a joke, with rents, house prices, wages, not worth it.
Australia is an island which is just too expensive!
Sooty
Australia is an island which is just too expensive!
Sooty
Sep 8th 2009, 8:28 am
#13
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Joined: Nov 2004
Location: Murrumbeena, Melbourne
Posts: 380
Re: FOREX GAINS Fund income tax return instructions 2009
Sorry to hear that but can totally understand.
I have had a total shock trying to sort out rental accomodation in Melbourne. What with that, initial hire car costs, move costs its all very pricey!
Not going to have much left out of my wages but hey keep thinking positive!!
If I didn't already have a chunk of aussie dollars already out there I am sure I would be reconsidering!!
I have had a total shock trying to sort out rental accomodation in Melbourne. What with that, initial hire car costs, move costs its all very pricey!
Not going to have much left out of my wages but hey keep thinking positive!!
If I didn't already have a chunk of aussie dollars already out there I am sure I would be reconsidering!!
