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US dividend exchange rates for foreign income calculation

Newbie

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Replies 1

Hi,

 

I own 100 shares in a US stock which paid a US$0.44 per share dividend, however my broker does not pay the dividend on the payment date and can take upto 30 days to pay the dividend into my account.

 

ex date: 2-Nov-2018

record date: 5-Nov-2018

payment date: 16-Nov-2018

 

My broker split the payment into 2 payments and paid it in AUD using an exchange rate at the time of the transaction:

21-Nov-2018: A$13.36 (exchange rate 0.7378: US$1.74 WHT)

7-Dec-2018: A$43.93 (exchange rate 0.7376)

Total received: A$57.29

 

When I complete my tax return do I declare the total AUD values paid to me by my broker on the 2 dates or do I need to convert the USD equivalent using the exchange rate for the payment date 16-Nov-2018?

 

And what exchange rate would I use to convert the US$1.74 WHT to AUD?

 

Thank you

 

 

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Devotee

Replies 0

Hi @MD2017.
 
Thanks for getting in touch!
 
You’re right - you do need to report any overseas income in Australian dollars on your income tax return. You can use appropriate exchange rates provided by:

  • a banking institution operating in Australia including, where relevant, the banking institution through which your foreign income is received
  • another reliable external source.

Provided your broker has used a reputable exchange to establish your exchange rate (and has records that support the rate they used), you can use the total of the payment you received when completing your income tax return.
 
If you’ve already paid tax on the dividend in the United States, you may also be eligible to claim a foreign income tax offset to reduce the amount of tax payable on this income. You can use the foreign exchange rates published on our website to calculate the value in AUD, or you can use an alternative exchange rate provided the value is from a reputable exchange and you keep a copy of the information you used with your records.

 

Hope that helps! Thanks.

1 REPLY 1

Most helpful response

Devotee

Replies 0

Hi @MD2017.
 
Thanks for getting in touch!
 
You’re right - you do need to report any overseas income in Australian dollars on your income tax return. You can use appropriate exchange rates provided by:

  • a banking institution operating in Australia including, where relevant, the banking institution through which your foreign income is received
  • another reliable external source.

Provided your broker has used a reputable exchange to establish your exchange rate (and has records that support the rate they used), you can use the total of the payment you received when completing your income tax return.
 
If you’ve already paid tax on the dividend in the United States, you may also be eligible to claim a foreign income tax offset to reduce the amount of tax payable on this income. You can use the foreign exchange rates published on our website to calculate the value in AUD, or you can use an alternative exchange rate provided the value is from a reputable exchange and you keep a copy of the information you used with your records.

 

Hope that helps! Thanks.