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


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
Photo of author, Michael PARKER 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
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Andy is a Solicitor at Hall & Wilcox Lawyers.
Current at March 2004
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