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Discussion in 'Accounting & Tax' started by thesuperman, 30th Jun, 2015.

  1. thesuperman

    thesuperman Well-Known Member

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    Within the same financial year, say you open up a US Brokerage account to trade US shares for your Self Managed Super Fund. You put in $10k and the exchange rate is AUD$1 = USD$1. You buy shares in one company on the 1st Jan for $10k and sell it for $9.5k in June making a $500 loss (5% loss). Then you decide to withdraw all your funds back to AUD but now the exchange rate is in your favour eg. AUD$1 = USD$0.75

    How would you work out the tax? You've made loss on the share trade but you've made a profit overall for the currency conversions. Which dates would you use & where do you get the exchange rates?
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    To the best of my knowledge, the trade incorporates both the trade itself plus the currency conversion - trading US shares automatically is also a FX trade, so tax will be made on the profit of the full deal, not just the share trade on its own.
     
  3. Cadbury99

    Cadbury99 Well-Known Member

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  4. thesuperman

    thesuperman Well-Known Member

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    Ok, so if it's the full deal that tax is calculated, say the funds hit your bank account in the 1st week of July does that mean you won't declare the tax until the next financial year then? Even if you requested the transfer of funds from $US to $AUD a few days ago?
     
  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    There are two items that impact the tax return.
    1. Trading result based on AUD / USD rates published by ATO for the month / avg for year etc
    2. The gain on the currency - Which may occur in a different tax period.
     
  6. thesuperman

    thesuperman Well-Known Member

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    What about if the US broker has issued you a "Wire Transfer Disclosure" on the 29th June with all the breakdown of fees & exchange rate they're using showing you the AUD amount you will receive, but it arrives on your bank account on 1st July. Would it still be in the 2014/2015 financial year or the year after since it arrives on 1st July?