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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:

             (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 $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 $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.

Guide to Subdivision 775-F



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