Document ID: chunk:federal_register_of_legislation:C2010C00611:clause:4_58:p1
Version: federal_register_of_legislation:C2010C00611
Segment Type: clause
Provision Reference: sch 4 cl 58 (pt 1/2)
Character Range: 36363–39419

58  After Part 4‑5 (heading) (before the link note)
Insert:

[The next Division is Division 775]

Division 775—Foreign currency gains and losses

Table of Subdivisions

 Guide to Division 775
775‑A Objects of this Division
775‑B Realisation of forex gains or losses
775‑C Roll‑over relief for facility agreements
775‑D Qualifying forex accounts that pass the limited balance test
775‑E Retranslation for qualifying forex accounts

Guide to Division 775

775‑5  What this Division is about

      Your assessable income includes a forex realisation gain you make as a result of a forex realisation event.
      You can deduct a forex realisation loss that you make as a result of a forex realisation event.
      There are 5 main types of forex realisation events:

                (a) forex realisation event 1 happens if you dispose of foreign currency, or a right to receive foreign currency, to another entity;
                (b) forex realisation event 2 happens if you cease to have a right to receive foreign currency (otherwise than because you disposed of the right to another entity);
                (c) forex realisation event 3 happens if you cease to have an obligation to receive foreign currency;
                (d) forex realisation event 4 happens if you cease to have an obligation to pay foreign currency;
                (e) forex realisation event 5 happens if you cease to have a right to pay foreign currency.

      There are special rules for certain short‑term forex realisation gains and losses.
      You may choose roll‑over relief for certain facility agreements.
      You may elect to receive concessional tax treatment for a qualifying forex account that passes the limited balance test.
      You may choose retranslation for a qualifying forex account.

Subdivision 775‑A—Objects of this Division

Table of sections

775‑10 Objects of this Division

775‑10  Objects of this Division

  The objects of this Division are as follows:
 (a) to recognise *foreign currency gains and losses for income tax purposes;
 (b) to quantify those gains and losses by reference to the change in the Australian dollar value of rights and obligations;
 (c) to treat certain foreign currency denominated financing facilities that are the economic equivalent of a loan as if the relevant facility were a loan;
 (d) to reduce compliance costs by not requiring the recognition of certain low‑value foreign currency gains and losses that involve substantial calculations.

Subdivision 775‑B—Realisation of forex gains or losses

Table of sections

775‑15 Forex realisation gains are assessable
775‑20 Certain forex realisation gains are exempt income
775‑25 Certain forex realisation gains are non‑assessable non‑exempt income
775‑30 Forex realisation losses are deductible
775‑35 Certain forex realisation losses are disregarded
775‑40 Disposal of foreign currency or right to receive foreign currency—forex realisation event 1
775‑45 Ceasing to have a right to receive foreign currency—forex realisation event 2
775‑50 Ceasing to