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INCOME TAX ASSESSMENT ACT 1997 - SECT 775.285

Retranslation of gains and losses relating to a qualifying forex account--forex realisation event 8

Forex realisation event 8

  (1)   Forex realisation event 8 happens if:

  (a)   you have made a choice for retranslation for a * qualifying forex account held by you; and

  (b)   that choice was in effect throughout a continuous period (the retranslation period ) consisting of:

  (i)   an income year; or

  (ii)   a particular part of an income year; and

  (c)   either:

  (i)   there is a positive retranslation amount for the account for the retranslation period (worked out under subsection   (2)); or

  (ii)   there is a negative retranslation amount for the account for the retranslation period (worked out under subsection   (3)).

Retranslation amount

  (2)   If the amount worked out using the formula in subsection   (4) is a positive amount, that amount is a positive retranslation amount for the account for the retranslation period.

  (3)   If the amount worked out using the formula in subsection   (4) is a negative amount, that amount is a negative retranslation amount for the account for the retranslation period.

  (4)   Work out an amount for the account for the retranslation period using the formula:

Start formula Closing balance of account for the retranslation period minus Opening balance of account for the retranslation period minus Total deposits made to account during the retranslation period plus Total withdrawals made from account during the retranslation period end formula

  (5)   For the purposes of subsection   (4), a debit balance is to be expressed as a negative amount (for example, a debit balance of $50,000 is to be expressed as minus sign$50,000).

Forex realisation gain

  (6)   You make a forex realisation gain if there is a positive retranslation amount for the account for the retranslation period. The amount of the forex realisation gain is the positive retranslation amount.

Forex realisation loss

  (7)   You make a forex realisation loss if there is a negative retranslation amount for the account for the retranslation period. The amount of the forex realisation loss is the negative retranslation amount.

  (8)   For the purposes of subsection   (7), reverse a negative amount (for example, a negative retranslation amount of minus sign$50,000 will become a forex realisation loss of $50,000).

Translation of foreign currency

  (9)   For the purposes of the application of section   960 - 50 to this section:

  (a)   if a retranslation period for an account did not begin immediately after the end of another retranslation period for the account--the opening balance of the account for the first - mentioned retranslation period is to be translated to Australian currency at the exchange rate applicable at the start of the first - mentioned retranslation period; and

  (b)   if a retranslation period for an account began immediately after the end of another retranslation period for the account--the opening balance of the account for the first - mentioned retranslation period is to be translated to Australian currency at the exchange rate applicable at the end of the other retranslation period; and

  (c)   the closing balance of an account for a retranslation period is to be translated to Australian currency at the exchange rate applicable at the end of the retranslation period; and

  (d)   each deposit is to be translated to Australian currency at the exchange rate applicable at the time of the deposit; and

  (e)   each withdrawal is to be translated to Australian currency at the exchange rate applicable at the time of the withdrawal.

Deposits

  (10)   For the purposes of this section, a deposit includes any amount paid or transferred into the account.

Withdrawals

  (11)   For the purposes of this section, a withdrawal includes any amount paid, advanced, drawn or transferred out of the account.


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