Change the way you feel about taxes. Get informed and discover what the taxman doesn’t want you to know. Foreign currency trading tax sections of the ATO tax acts is foreign currency trading?
That is cash base online trading with no physical goods exchange? The tax treatment of foreign currency gains and losses is discussed in Division 775 of the Income Tax Assessment Act 1997. The Division effectively caters for all types of foreign currency transactions including having a foreign currency denominated bank accounts and shares, overseas rental properties, trading stock, hedging transactions as well as the purchase and subsequent disposal of capital assets. Section 775-15 states that foreign gains are assessable when they are realised unless it is a gain of a domestic or private nature, such as when you go travelling overseas on holidays or purchase goods for personal use. However to take advantage of this exemption you must make an election to disregard any realised foreign currency gains or losses for accounts with a balance under this threshold.
Sub-division 960C of the Income Tax Assessment Act 1997 sets out the rules for foreign currency to be translated into an Australian dollar amount including the use of an appropriate prevailing exchange rate for the translation. Dec 2011 issue of YTE Magazine www. Copyright Your Media Edge Pty Ltd 2011. 250,000 I can elect for it to be not assessible for tax purposes whether I make a gain or a loss? Hi Mr Taxman, Thank you for providing such informative site for all of us – very gen of you! My question is about Forex Currency Trading. I claim this as an expense on my Tax Return?
Also, how many years are Business losses quarantined for? Where on the etax do i enter my profits or losses? Also, just trying my luck, are paid forex courses tax deductible? 15 of your income tax return. I hope someone can help me.
I doing my etax and am not sure if my Forex trading losses is deductible against my Assessible Income, or does it falls under Capital Loss. I opened up a Forex trading account abroad and it had been traded by a company for a month but it suffered losses so I closed my account and pulled out the remaining fund. Victor – your trading losses are quaratined against future trading gains. 250k of funds into a foreign currency bank account 2 years ago with the intention of making a profit and now wish to draw on those funds having made a loss – is the loss regarded as a deduction?
If so, where in an individual’s tax return does it belong? You can show the loss in the foreign currency income question of your income tax return. Hi Mr Taxman, I have an overseas stockbroking account on which I trade U. Would USD cash balances held in this account count toward the AUD250,000 tax exemption threshold, if I made an election? Or do accounts only qualify if they are pure bank accounts? Also had a foreign option trading account for years in loss – will it be tax dedutiable only towards any future capital gains? By all means include in your tax return.
Hi Mr Taxman, if I am holding CHF450,000 in a Swiss Franc denominated account that i opened 2 years ago do i need to account for any FX movements in the balance from year to year. The account only derives interest income monthly. AUD250,000 then you will need to take into account FX movements. Regarding “foreign gains are assessable when they are realised”: From a business point of view, does ‘realised’ mean that I only have to pay tax on the profit when I withdrawl the profit from the broker’s account? In other words, if I leave the profit in the broker’s account and continue to trade with the profit, I wont pay tax until I start withdrawing?
Is that right or am I way off base? Is that tax paid monthly, quarterly or yearly and do we have a choice in that matter? What documentation have you provided your accountant? Hi, i currently holding some speculative currencies that I have exchanged Aussie dollars for. I hope to exchange it back at some point when it has appreciated. As this is an exchange and not an investment, am i liable to pay tax on this? Sounds like you are carrying on a business.
What is the value in AUD? I have just started trading and want to know what my tax implications are with regards to forex trading. What tax rate do you pay? Is there a tax free threashold?
Can you also purchase a computer and use the cost against any tax? If you don’t have any other income then you will get the tax free threshold. Expenditure directly related to your income activity will be deductible to the extent that they occurred after you started the activity – that is, you can’t claim that course last year that pushed you into trading. Hi, will ato regard trading forex full time as a Personal Service Income ? I would not consider it to be Personal Services Income. I want to rent an apartment with a room dedicated to my forex trading. Yes you can claim the portion of rent for that room Mandy.
Normal income if you are a trader, regardless of the time that you spend trading. Hi Mr Taxman, I am a part time currency trader and I’m renting a room in a 3bedroom house. Hi Mr Taxman, I have an account that essentially works as an automated trade service from a signal provider. I don’t do any actual trading myself, I just log in and check occasionally as the money increases, but it is only a small amount, less than 5K. It is, however, with an Australian Broker, not offshore. Will I need to declare this on Tax and pay a fee? So in this particular instance when a there is a trade copier service or some automated software that actually does the trading can a tax effective structure be put in place.