Private ruling: Capital gains tax - foreign exchange translation rules
Published: July 2013

Ruling: Q1:  | A1: This ruling applies for the following period(s) Year ended 30 June 2010 Year ended 30 June 2011 Year ended 30 June 2012

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You became an Australian resident for tax purposes on 1 July 200X. At that date you held investments in two overseas countries. You used the market value of the shares on 1 July 200X, as your cost base for the shares you held. Throughout the year ended 30 June 20XX, you brought and disposed of shares. Each month there were numerous transactions, with an average of close to X share transactions in each month.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 960-50(6)

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. For taxation purposes, amounts in foreign currency must be translated in Australian currency. According to subsection 960-50(6) (Item 5) of the Income Tax Assessment Act 1997 , an amount of money or other property received in relation to a capital gains tax (CGT) event must be translated into Australian currency at the exchange rate applicable at the time of the event. In your case, during the year you brought and disposed of shares you acquired overseas and you have realised various capital gains and capital losses. Therefore, you are required to translate the foreign currency to Australian currency at the exchange rate applicable at the time of disposal of your shares.

Subject: Capital gains tax - foreign exchange translation rules: Question: Can you apply the average foreign exchange rate to calculate your capital gains and capital losses on the disposal of your shares?