I'm a bit confused about how CGT & currency conversion works for foreign shares. I feel like this must be a really common thing, but I can't seem to find a clear end-to-end worked example (maybe I'm searching the wrong terms?).
Anyway, the scenario is:
1. Exchange some AUD into USD. 2. Purchase some US shares using the USD (within a few days). 3. At some point in the future, sell the shares and receive the USD proceeds. 4. Convert the USD into AUD (within a few days).
What are the tax implications here?
I found this page about the "12 month rule", which I think means the capital gain is calculated using the AUD amounts from steps 1 & 4 above, and there aren't any other forex taxes to worry about?
Does this mean the ATO's foreign exchange rates don't come into the picture, and all that really matters is the amounts that went out of and into my Australian bank account? (Which implicitly takes into account the actual exchange rate I got?).