This session provided insights into the proposed reform of the treatment of foreign currency exchange gains and losses for Australian income tax purposes. It also explained other changes affecting the realisation of traditional securities for income tax purposes, as contained in the Exposure Draft New Business Tax System (Taxation of Financial Arrangements) Bill 2002.
Presentations addressed the key reform proposals contained in the Exposure Draft Bill, including:
- the General Conversion Rule to apply to foreign currency transactions
- rules to govern when foreign currency gains and losses are brought to account for income tax purposes and the exceptions to the rules
- rules to govern the character of foreign currency gains and losses for income tax purposes
- functional currency rules for certain resident and non-resident taxpayers
- rules to 'defer' the taxing point for traditional securities in particular circumstances.