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INCOME TAX ASSESSMENT ACT 1997 - SECT 775.65

Only one forex realisation event to be counted

Option to buy foreign currency

  (1)   The following table applies to an option to buy a particular * foreign currency if the exercise price is payable in another foreign currency:

 

Option to buy foreign currency

Item

If you are...

and both of these events happen when the option is exercised...

this is the result...

1

the entity who is capable of exercising the option

(a) forex realisation event 1;

(b) forex realisation event 4

ignore forex realisation event 4.

2

the entity who is capable of exercising the option

(a) forex realisation event 2;

(b) forex realisation event 4

ignore forex realisation event 4.

3

the entity who granted the option

(a) forex realisation event 3;

(b) forex realisation event 4

ignore forex realisation event 3.

Option to sell foreign currency

  (2)   The following table applies to an option to sell a particular * foreign currency if the exercise price is payable in another foreign currency:

 

Option to sell foreign currency

Item

If you are...

and both of these events happen when the option is exercised...

this is the result...

1

the entity who is capable of exercising the option

(a) forex realisation event 3;

(b) forex realisation event 5

ignore forex realisation event 3.

2

the entity who granted the option

(a) forex realisation event 3;

(b) forex realisation event 4

ignore forex realisation event 3.

Forward contracts

  (3)   The following table applies to a contract to buy a particular * foreign currency in return for another foreign currency:

 

Forward contracts

Item

If both of these events happen when the contract is carried out...

this is the result...

1

(a) forex realisation event 1;

(b) forex realisation event 4

ignore forex realisation event 4.

2

(a) forex realisation event 2;

(b) forex realisation event 4

ignore forex realisation event 4.

Residual rule

  (4)   If:

  (a)   2 or more of forex realisation events 1, 2, 3, 4 and 5 happen to you at the same time in relation to the same rights and/or obligations; and

  (b)   none of the above subsections applies;

apply the forex realisation event that is most appropriate, and ignore the remaining event or events.


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