Draft Taxation Determination

TD 2014/D10W2 - Notice of Withdrawal

Income tax: does forex realisation event 4 happen to the debtor under subsection 775-55(1) of the Income Tax Assessment Act 1997 on repayment of a loan taken out prior to the effective date of a choice to use the applicable functional currency and denominated in the same non-AUD currency that later becomes the applicable functional currency?

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Notice of Withdrawal

1. TD 2014/D10 deals with whether subsection 775-55(1) of the Income Tax Assessment Act 1997 is satisfied on repayment of a loan obligation which straddles the effective date of an applicable functional choice and which is denominated in the same non-AUD currency as the applicable functional currency.

2. Following comments received as part of the public consultation process for TD 2014/D10, the ATO withdrew the draft Determination on 8 October 2014.

3. We now consider a new draft determination is unwarranted due to insufficient demand. Furthermore, we also now consider that it would not be correct to take the view that forex realisation event 4 does not happen in the circumstances outlined in former TD 2014/D10.

4. We will apply the view that forex realisation event 4 happens in the circumstances outlined in former TD 2014/D10 to gains and losses where the applicable functional currency election is made on or after 12 June 2024.

Commissioner of Taxation
8 October 2014

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References

ATO references:
NO 1-5FAVENP