$250,000 Balance Election
<h2 >The $250,000 balance election</h2>
<p >The ordinary operation of the foreign exchange (forex) measures, as contained in <a href="https://www.ato.gov.au/law/view/document?Docid=PAC/19970038/775-5" >Division 775</a> of the <em >Income Tax Assessment Act 1997</em> (ITAA 1997), is that deposits to, and withdrawals from, foreign currency denominated bank accounts may give rise to a gain or loss that is realised under the measures. Withdrawals from an account with a credit (positive) balance will also generally have a consequence under the capital gains tax (CGT) provisions.
However, the $250,000 balance election broadly enables you to disregard certain foreign currency gains and losses on certain foreign currency denominated bank accounts and credit card accounts (called qualifying forex accounts) with balances below a specified limit.
An election can be made for a qualifying forex account. A qualifying forex account is an account that is:</p>
<ul >
<li >denominated in a foreign currency</li>
<li >either a credit card account, or an account held for the primary purpose of facilitating transactions.</li>
</ul>
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