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SMSF Valuation of Foreign Investments

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Newbie

Views 517

Replies 2

Hello,

Our SMSF system calculates foreign transactions based on the RBA rates not the ATO exchange rates.

My question is whether it is ok to use the RBA rate rather than the ATO rate when valuing the investments as at 30 June. I notice the RBA rate for USD as at 30 June 2019 is 0.7013 whereas ATO have 0.7332.  This can make quite a difference with high valued investments.  Which in turn makes a difference for the Total Super Balance and the minimum pension.

ta

MD1

1 ACCEPTED SOLUTION

Accepted Solutions
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Most helpful response

Devotee Registered Tax Practitioner

Replies 1

This sounds like you are using BGL.  If so, then you can over-ride the RBA rates and use ATO rates.

The rationale provided by BGL is shown below -   see help file 

For example

30/06/2019
RBA rate (USD -100.00 / 0.7013)
25000/CBA123456 - new
 
 
 
 
 
  142.59
  30/06/2019
ATO rate (USD -100.00 / 0.7332)
85000 - Income Tax Payable/Refundable
 
 
 
 
 
  136.39

Which ever way you go, apply methods consistently.

 

BGL has opted to use the official end of day exchange rates from the RBA instead of those provided by the ATO.

 

This is due to the ATO not providing daily rates, not providing timely data, not providing daily rates older than 2 years and not providing data which is easily machine-readable. You will have the ability to overwrite the conversion rate

 

Alternatively, average rates are published to the Tax Office website. Here you can find lists of exchange rates for selected countries including average monthly and yearly rates. Alternatively, 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. You can also use rates published by another reliable external source. The rate used and the source of rates should be kept with your records. The Reserve Bank of Australia (RBA) provides official exchange rates on its Website. 

 

2 REPLIES 2
Highlighted

Most helpful response

Devotee Registered Tax Practitioner

Replies 1

This sounds like you are using BGL.  If so, then you can over-ride the RBA rates and use ATO rates.

The rationale provided by BGL is shown below -   see help file 

For example

30/06/2019
RBA rate (USD -100.00 / 0.7013)
25000/CBA123456 - new
 
 
 
 
 
  142.59
  30/06/2019
ATO rate (USD -100.00 / 0.7332)
85000 - Income Tax Payable/Refundable
 
 
 
 
 
  136.39

Which ever way you go, apply methods consistently.

 

BGL has opted to use the official end of day exchange rates from the RBA instead of those provided by the ATO.

 

This is due to the ATO not providing daily rates, not providing timely data, not providing daily rates older than 2 years and not providing data which is easily machine-readable. You will have the ability to overwrite the conversion rate

 

Alternatively, average rates are published to the Tax Office website. Here you can find lists of exchange rates for selected countries including average monthly and yearly rates. Alternatively, 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. You can also use rates published by another reliable external source. The rate used and the source of rates should be kept with your records. The Reserve Bank of Australia (RBA) provides official exchange rates on its Website. 

 

Highlighted

Newbie

Replies 0

Thanks Bruce4Tax,

 

I'd rather not override BGL as that would be time consuming.  So best then that I stick tothe RBA rates when working out the market value of investments as all other foreign transactions have used the RBA rate.

 

I would assume 'You can also use rates published by another reliable external source' would include the RBA.

 

Thanks