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INCOME TAX ASSESSMENT ACT 1997 - SECT 775.255

Notional realisation when qualifying forex account starts to pass the limited balance test

Credit balance

  (1)   For the purposes of this Division, if:

  (a)   you hold a * qualifying forex account; and

  (b)   at a particular time:

  (i)   the account starts to pass the limited balance test; and

  (ii)   the account has a credit balance; and

  (iii)   you have one or more rights to receive a total amount of * foreign currency represented by the credit balance of the account;

you are treated as:

  (c)   having ceased to have those rights at that time; and

  (d)   having re - acquired those rights immediately after that time.

Note:   This means that forex realisation event 2 will happen when the account starts to pass the limited balance test.

Debit balance

  (2)   For the purposes of this Division, if:

  (a)   you hold a * qualifying forex account; and

  (b)   at a particular time:

  (i)   the account starts to pass the limited balance test; and

  (ii)   the account has a debit balance; and

  (iii)   you have one or more obligations to pay a total amount of * foreign currency represented by the debit balance of the account;

you are treated as:

  (c)   having ceased to have those obligations at that time; and

  (d)   having started to again owe those obligations immediately after that time.

Note:   This means that forex realisation event 4 will happen when the account starts to pass the limited balance test.


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