Q&A: Taxation of Foreign Exchange Gains and Losses - The New Rules Part I

Published on 01 Feb 04 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

The recognition of foreign exchange gains and losses has long been a murky issue in the tax return checklists of practitioners. Not only have there been issues of when is the appropriate time to recognise such a gain or loss, but also the question of whether the gain or loss should be on revenue or capital account.

In an attempt to clarify the law, discrete provisions have been added to the tax legislation.

In this article, we summarise the basic rules of forex recognition. Part 2 of this series, published in the March 2004 edition of Taxation in Australia, examines some of the variations, concessions and transitional rules that have been introduced.

Author profiles

Michael Parker CTA

Michael Parker, CTA, is a Partner in the Taxation section of Hall & Wilcox Lawyers. His practice focuses on tax disputes, domestic income tax issues, including CGT and Div 7A, business sales, acquisitions and restructures and GST. Michael has extensive experience handling a broad range of taxpayer disputes, including disputes concerning the small business CGT concessions, having acted for the taxpayers in White v FCT [2009] FCA 880, White v FCT [2012] FCA 109 and Altnot v FCT [2013] AATA 140, among other cases. Michael regularly consults to the Board of Taxation and Treasury, including in respect of Div 7A, small business impediments and the small business CGT concessions. He is a regular presenter for The Tax Institute. - Current at 31 October 2019

More by Michael PARKER

• Division 7A Changes: Get Ready! paper - 21-March-2019
• Division 7A and winding up structures paper - 05-July-2016
• Division 7A and winding up structures - 01-December-2015
• Preparing for retirement & succession planning paper - 05-November-2015
• Division 7A and winding up structures paper - 08-October-2015
• Some welcome tax relief for small business - 09-June-2015
• Trustee resolutions - Including Section 100A paper - 28-May-2015
• ATO guidelines on professional practice structures - 14-October-2014
• Setting the scene paper - 16-April-2014
• A review of major tax developments in 2013 paper - 17-October-2013
• What the ATO will be targeting in 2013/14 - 12-August-2013
• Small business CGT concessions paper - 31-October-2006
• Questions & Answers: Division 43 and section 262A (4AJA) notice requirements for capital allowances - 01-February-2006
• Q & A: Funding discretionary trust distributions; Deductibility of interest - 01-October-2005
• Q&A: What to do when the ATO and AFP come knocking - 01-July-2005
• Q&A: CGT - some issues arising in practice - 01-June-2005
• Q&A: Options - 01-May-2005
• Q&A: Co-operatives and Non-profits denied application of mutuality principle - 01-October-2004
• Q&A: Tricks and traps when settling disputes - 01-September-2004
• Q&A: Family Trust Elections - 01-August-2004
• The Commissioner suggests some questions - 01-April-2004
• Q&A: Taxation of Foreign Exchange Gains and Losses - The New Rules Part 2 - 01-March-2004
• Q&A: Value Shifting Basics - 01-December-2003
• Case Study: Winding Up a Business seminar paper - 15-November-2003
• Q&A: Value Shifting Basics - 01-November-2003
• ATO can go "Firth" and multiply - 01-July-2003
• Q&A - PSI, Part IVA & Mochkin's case - paper, rocks or scissors? - 01-June-2003
• Q&A - 01-May-2003
• Q&A - 01-April-2003
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• Q & A - 01-March-2003
• General tax update - 18-October-2002
• Q and A: Demergers - 01-September-2002
• Q and A: The new franking rules - 01-August-2002
• Q & A: private company loans and Division 7A - 01-July-2002
• Q & A: Unit Trust Distributions - 01-April-2002
• Tax Q & A - 01-May-2001
• Tax Q&A - 01-April-2001
• Q & A: Non-Commercial losses: new tests - 01-November-2000
• Q&A: Scrip-for-scrip rollover - 01-October-2000
• Tax Q&A: imputation credits and dividend rebates - don't lose them on 1 July 2000 - 01-June-2000
• Tax Q&A: CGT concessions amending legislation - 01-April-2000
• Tax Q & A: Ralph Reforms: Capital gains tax amending legislation: trusts live! - 01-February-2000
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Click here to expand/collapse more articles by Michael PARKER.

Andy MILIDONI

Andy is a Solicitor at Hall & Wilcox Lawyers.
Current at March 2004

More by Andy MILIDONI

• Q&A: Taxation of Foreign Exchange Gains and Losses - The New Rules Part 2 - 01-March-2004
• Q&A: Business Real Property: Where to draw the line? - 01-October-2003
• Q & A: Division 35 - Non-Commercial Loss Provisions - 01-May-2002
• Q and A: PSI and PAYG - 01-March-2002
• Q & A: Reasonably arguable position papers - how to be wrapped in a RAP - 01-February-2002

Click here to expand/collapse more articles by Andy MILIDONI.