On Wednesday 6 August 2014, Tony Frost CTA (Greenwoods & Freehills) attended a meeting with the ATO to discuss Draft Taxation Determination TD 2014/D10 Income tax: does forex realisation event 4 happen to the debtor under subsection 775-55(1) of the Income Tax Assessment Act 1997 on repayment of a loan taken out prior to the effective date of a choice to use the applicable functional currency and denominated in the same non-AUD currency that later becomes the applicable functional currency? At the meeting, representatives from the professional associations and other practitioners discussed the policy behind the functional currency rules and Division 775, the history of practitioners raising concerns about the interpretation adopted by the ATO in previous consultations, the ATO’s prior practices (e.g. as can be seen in edited PBRs), submissions made on TD 2014/D10, and a prospective date of application. Although the ATO has made no decisions yet, at this stage it seems unlikely that TD 2014/D10 will be changed substantively, apart perhaps from the date of effect, where the ATO was sympathetic to the practitioners’ appeal for a prospective application date from the date of finalisation. The date of finalisation of TD 2014/D10 was not confirmed.
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