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?

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.

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

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.

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.