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Go Matilda - Your Gateway to Australia The Go Matilda Forums The Go Matilda Forums The Tax and Money Forum money transfers
The Go Matilda Forums The Go Matilda Forums The Tax and Money Forum money transfersPage 1 2
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Member |
Farmer - reveal all, and I may change my mind!
Best regards. Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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PS. Remember that I have dealt with the tax and immigration authorities for many a year now, and unless they can be bound by an opinion (usually expressed in writing) I tend to take what they say verbally or informally with a pinch of salt ... particularly in an area such as this where (in my view - for the present at least) there is no specific published guidance on what constitutes a "private nature" forex gain or loss.
This said, please don't think I'm not receptive to hearing your experiences. Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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PPS. Did the opinion which you obtained (Farmer) say a forex gain in the hands of a migrant isn't assessable because it is private in nature?
If so, did the opinion say WHY it is private in nature, and on what basis such a gain would be considered to be private in nature? Is there any reference to underlying case law or legislation? Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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The advice has lots of boiler plate and refers to different parts of the legislation but does not define “of a private or domestic nature”. It would seem to me to be difficult to define beyond what the ATO have already told me except by listing what it does not cover and which is therefore taxable. Regards |
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From what I am hearing from you (Farmer) and others anecdotally it seems likely that the ATO's approach in this area is similar to the 6 month "window" that applies in the area of pension transfers - the exemption from applying the strict letter of the legislation isn't actually provided for in the legislation (so far as I know), but ATO policy is nevertheless to allow an exemption.
In other words, even though there doesn't seem to be anything one could rely on in the event one is challenged by the ATO, the tax office practice would seem to be to allow individual taxpayers to ignore forex gains and losses. Nevertheless I think we should continue to press for an ATO statement in this area, to obtain clarity on which we can all rely. Best regards. Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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Alan,
Having taken another long look at all the documentation I have come to the conclusion that as far as the new legislation in 775 is concerned there is an exemption from forex transactions of a private nature and that this was always the intention of the law. However, when they introduced section 775 they did not do anything to tidy up the CGT legislation so that foreign currency even in private hands is still regarded as a CGT asset and thus any gain on currency could be deemed assessable under CGT. Remember that a forex gain under 775 is regarded as revenue whereas previously a gain on currency would have come under CGT. It may well be that the ATO recognise that they have screwed up but do not wish to do so publically which is why they are prepared to give private rulings following the intention of the law. This is not satisfactory and the ATO needs to come clean. |
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In the end it seems to come down to when you opened the bank account from which the transfer was made. I am fortunate that although I have made dozens of transfers they have all been from accounts opened before 1985 or after July 2003. Hence any gains are exempt from both forex rules and cgt. Regards |
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