Income tax: capital gains: if Australian currency facilitates a CGT event happening to a CGT asset, how is the Australian currency treated for capital gains purposes?

Currency, being notes and coins, is generally the medium of exchange for a CGT event. For the CGT event, the use of the currency as the medium of exchange, of itself, has no direct capital gains consequences.

We focus on the CGT asset, the subject of the CGT event. The amount of the Australian currency forms part of the capital proceeds and cost of acquisition for the parties concerned.

Grant pays $10,000 in notes to purchase a painting from Debbie. For capital gains purposes we focus on the disposal by Debbie of the painting. The notes merely facilitate the exchange.

We invite you to comment on this Draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period. Comments by Date: 10 September 1999 Contact officer details have been removed following publication of the final ruling.