CFDs and how to report to Centrelink

[deve]

Hello

I'm asking this on behalf of someone else. Just wondering if anyone here has had any experience in this area.

How should CFDs be reported to centrelink? ie if I but $2000 worth of BHP shares at 10% margin and pay $200, do centrelink add $2000 to the value of your assets when considering social security payments?

If I have a trading account of $10,000 and with that trade up to $100,000 worth of shares using CFDs, do centrelink look at this as if I have assets of $100,000 worth of shares?

Thanks for any tips

Steve

 

[nioka]

Hello

I'm asking this on behalf of someone else. Just wondering if anyone here has had any experience in this area.

How should CFDs be reported to centrelink? ie if I but $2000 worth of BHP shares at 10% margin and pay $200, do centrelink add $2000 to the value of your assets when considering social security payments?

If I have a trading account of $10,000 and with that trade up to $100,000 worth of shares using CFDs, do centrelink look at this as if I have assets of $100,000 worth of shares?

Thanks for any tips

Steve

A phone call to centrelink will get an answer. I'm sure that it is $10,000 as the asset.

 

[deftfear]

I have had to report assets to centrelink before, but stopped reporting once I had a cfd account because I knew it would all be too hard.

Centrelink contstantly got my shareholdings wrong, and wouldnt update them when I told them that they were wrong and they recognised options as fully paid shares. I really cant see how they would be able to record cfd transactions correctly if they cant those basic things correct.

 

[CFD]

I understand your frustration, but the reporting obligation to Centrelink is not in any way dependant on how they use the info.

 

[whitta27]

.. but centrelink - would they correlate with your cfd provider>
cos you could get in trouble if you get caught

 

[Prem]

Just tell centrelink about your $10000 in CFD's and your in the clear. They cant hold you responsible for them not understanding what a CFD is.

Hope this help!!

 

[deftfear]

I should mention that I stopped reporting and also stopped receiving benefits at the same time, so I am not misleading centrelink in any way. I just decided it wasn't worth the effort and cancelled my payment.

 

[waz]

Im guessing that if you did report anything about cfd's then you would only report the equity in your account (which ofcourse will change second by second if you have an open position).

Also, i think its wrong to call a cfd an asset. Its more of a liability.

I think of it this way. If you have a credit card with a limit of $10,000 and you go out and buy $10,000 worth of stuff which you have used up, would you report that to centrelink?

 

[whitta27]

yes.
because if u making a winning trade and report it - then make a losing one to the same value.. - i doubt much they will care about ur losing one.

its a quite difficult scenario..

 

[opulence]

So roughly on the same line but I'll probably only be trading basic shares at first.

What I had thought of doing was applying for an ABN and then adding it to the reported income list. That way if at the end of the fortnight I earn any money I'll report it.

I doubt they'll give me credit if (more like when) I go through loosing periods.

Is this the best way to do it or am I confusing income and capital growth?

 

[robots]

hello,

you wouldnt need to report anything for CFD's, only report bank accounts, share holdings

you dont own any share in a CFD deal, its a bet, no voting rights, zippo


thankyou
professor robots

 

[Julia]

So roughly on the same line but I'll probably only be trading basic shares at first.

What I had thought of doing was applying for an ABN and then adding it to the reported income list. That way if at the end of the fortnight I earn any money I'll report it.

I doubt they'll give me credit if (more like when) I go through loosing periods.

Is this the best way to do it or am I confusing income and capital growth?

I had some experience with this when doing my father's tax returns.
When you buy shares you simply report to Centrelink that you have bought x number of shares in x company. They do the rest.

Then obviously if you sell those shares, you report that to them.
As I recall how it worked, they assess you on a deeming of income basis for the income test, and they re-assess the capital value every few months for the asset test.

It was a while ago that I knew about this. I suggest you give them a call and ask to ensure you don't step on their toes. That is not a good idea.

 

[son of baglimit]

A phone call to centrelink will get an answer. I'm sure that it is $10,000 as the asset.

I have had to report assets to centrelink before, but stopped reporting once I had a cfd account because I knew it would all be too hard.

Centrelink contstantly got my shareholdings wrong, and wouldnt update them when I told them that they were wrong and they recognised options as fully paid shares. I really cant see how they would be able to record cfd transactions correctly if they cant those basic things correct.

Just tell centrelink about your $10000 in CFD's and your in the clear. They cant hold you responsible for them not understanding what a CFD is.

Hope this help!!

hello,

you wouldnt need to report anything for CFD's, only report bank accounts, share holdings

you dont own any share in a CFD deal, its a bet, no voting rights, zippo


thankyou
professor robots

the very best of luck trying to explain to some dodo from centrelink the finer points of CFD's. they wont know what they are, they wont understand how they work, simply because they have never, nor never will be trained to understand them. the same goes for the ATO - youll get 6 different answers from 6 different calls on the exact same question - invariably it comes down to either who they refer to, the reference materials they use, or the interpretation they put on them at the time.

sorry no help - just my view.

 

[robots]

hello,

thats because its a "BET", straight up gamble and nothing wrong with that

now, if you start to make 20,30 or 70k in a regular pattern they can deem it as a system, regular, orchestrated and trading

but if its a "HOBBY", no requirement

thankyou
professor robots

 

[nulla nulla]

Hello

I'm asking this on behalf of someone else. Just wondering if anyone here has had any experience in this area.

How should CFDs be reported to centrelink? ie if I but $2000 worth of BHP shares at 10% margin and pay $200, do centrelink add $2000 to the value of your assets when considering social security payments?

If I have a trading account of $10,000 and with that trade up to $100,000 worth of shares using CFDs, do centrelink look at this as if I have assets of $100,000 worth of shares?

Thanks for any tips

Steve

hello,

you wouldnt need to report anything for CFD's, only report bank accounts, share holdings

you dont own any share in a CFD deal, its a bet, no voting rights, zippo


thankyou
professor robots

Good article by Marcus Padley in the Sydney Morning Herald Weekend Business section on the subject of CFD's yesterday. Professor Robots has it in one. With CFD's, you don't own the shares, you are in effect making a wager and the owner ship of the shares remains with the CFD account provider.

 

[patchau]

I have been through this with Centrelink when I traded futures and spoke with them several month ago about CFD'S.

When you call Centrelink you MUST ask to speak with a "Complex Assessment Officer" , they know about CFD'S.

They treat CFD trading similar to a small business. At the end of each month you submit a Profit/Loss statement. They do not look at the trades just have you made or lost money. If you have open trades and they are in profit then that profit counts, the reverse for a loss.

Their concern is the starting capital eg.. has the initial S10,000.00 gone up or down and then this amount +profit or -loss, is used to make the assessment.

Say you have a bad month and your Capital is down to $8,000.00 then Centrelink now reduces your cash assets by $2,000.00.

Hope this helps.