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Tax Calculation on Overseas Share Trading

Discussion in 'Accounting, Tax & Legal' started by barry777, 26th May, 2011.

  1. barry777

    barry777 New Member

    Joined:
    26th May, 2011
    Posts:
    2
    Location:
    newcastle
    I have a question related to trading in shares on overseas share markets. In my case I have an account in us dollars with a broker. I remit money to the broker in US dollars and the broker holds the money in a US bank account.

    When I use the brokers internet trading facility the money to buy the shares is drawn from my US dollar account with the broker [sales proceeds are deposited into the same account].

    How do I calculate profits/losses on the share trading with regards to the rules of the Australian Tax Office [ in other works how do I calculate the assessable profits/losses]? The calculation would involve currency conversions.

    Example: Share transactions: in companies X and Y:
    Date.............Qty.. Price.Total...US$....A/C Bal.|.Trans....A/c
    ............................US$...US$..forex.....US$....|.actions..Bal
    _________________________________________----AUS$----
    day1__remit from Australia to
    _____the broker's account_____1.000__100000_|100000___100000
    day10_X_BUY_500__$5__2500-_0.980___97500_|__2551-___99490
    day20_Y_BUY_1000_$3__3000-_0.850___94500_|__3529-__111176
    day50_Y_SELL1000_$4__4000+_0.750___98500 _|_5333+__131333
    day70_Y_SELL_500_$4__2000+_0.650___100500_|_3076+__154615
    --------------------------------------------------------------
    TRADING TOTALS $US 500+_____________$AUS 2322+
    ___________________[profit]______________[profit]
    Assume I am an Austrtalian Resident and am a trader for tax purposes in Australia. All transactions in the one financial year. No withdrawals from my US $ account with the broker.

    Any help would be appreciated. Sounds like an exam question but I found almost nothing on the web or on the ATO site. Any URLs would be appreciated.
     
    Last edited by a moderator: 26th May, 2011
  2. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Transactions are translated at spot rates for their respective times.

    If a share trader, closing stock valued at the spot rate for your end of tax year.

    Cheers,

    Rob
     
  3. barry777

    barry777 New Member

    Joined:
    26th May, 2011
    Posts:
    2
    Location:
    newcastle
    thanks Rob - that's what I am hearing and it tallies with tax legislation.