Hi folks, I've got a question about the tax implications of buying & selling foreign shares. The scenario basically is:
1. Convert some AUD into USD.
2. A few days later, purchase some US shares with the USD.
3. At some point in the future, sell the US shares and receive the USD proceeds.
4. A few days after that, convert the USD proceeds into AUD.
What are the tax implications of this? (Assume the shares don't pay dividends.)
Is it simply a matter of calculating the CGT using the AUD amounts from steps 1 & 4? (i.e. the amounts that left & entered my Australian bank account)?
Or, do I need to perform two separate CGT calculations...one for steps 2 & 3 using the ATO's published exchange rates, and another for the currency gain/loss between steps 3 & 4?
I feel like this must be a really common situation, but I can't for the life of me find a definitive answer. Thanks for any help!