Who can claim
This deduction is available to individuals and companies.
- A forex realisation event produced a deductible loss under the foreign-currency rules.
- Any applicable election, 12-month rule, functional-currency or limited-balance account treatment has been applied.
What you cannot claim
- Do not treat a foreign-currency movement as deductible merely because an account value changed.
- Private, exempt-income and capital amounts can be excluded or treated under another rule.
- The taxation-of-financial-arrangements rules can apply instead of Division 775 and require a separate calculation.
How the amount is worked out
Calculate the realised Australian-dollar loss under the applicable forex event and election, then reduce or defer it where a statutory exception applies.
Records the ATO expects
- Foreign-currency statements
- Exchange rates and conversion method
- Election records
- Forex calculation
Where this rule comes from
Primary source: Income Tax Assessment Act 1997 Division 775 (Section 775-30 and Division 775). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.