CFDs and tax
- Thread starter jiggy
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Re: CFD's and tax
I believe CFD profit and losses are treated as income no CGT on it and dividend paid are never franked dividend making them as an income as well.
I am also interested to get on the CFD wagon but don't know much about it, can anyone tell me if CFD works the same as margin loan? Who is the best provider and why? and why are CFD better than warrants and options?
I believe CFD profit and losses are treated as income no CGT on it and dividend paid are never franked dividend making them as an income as well.
I am also interested to get on the CFD wagon but don't know much about it, can anyone tell me if CFD works the same as margin loan? Who is the best provider and why? and why are CFD better than warrants and options?
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Re: CFD's and tax
I would bet that the tax office wouldn't know. Would I be taxed on that bet?
jiggy said:
I would bet that the tax office wouldn't know. Would I be taxed on that bet?
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Re: CFD's and tax
CFD's are a taxable investment, that is CGT does apply.
Although most CFD trades are less than a year so discount rules would rarely apply
I think this is what your looking for
http://law.ato.gov.au/atolaw/view.htm?find="TR 2004/D17"&docid=DTR/TR2004D17/NAT/ATO/00001
CFD's are a taxable investment, that is CGT does apply.
Although most CFD trades are less than a year so discount rules would rarely apply
I think this is what your looking for
http://law.ato.gov.au/atolaw/view.htm?find="TR 2004/D17"&docid=DTR/TR2004D17/NAT/ATO/00001
Re: CFD's and tax
Good question I am wondering that too. I am on the highest tax bracket too but my wife does not work (Actually earns about $10 000) per year. What I do is invest everything under her name. I am also wondering if there is a more cost effective way of doing that as you said through trust, company or other.
jiggy said:
Good question I am wondering that too. I am on the highest tax bracket too but my wife does not work (Actually earns about $10 000) per year. What I do is invest everything under her name. I am also wondering if there is a more cost effective way of doing that as you said through trust, company or other.
Re: CFD's and tax
This is not financial advice but there will come a point where investing under your wifes name will no longer be as viable as a flat tax rate of 30%. However that point is a long way off for most. I havn't got tax thresholds on hand but you would need to be well into the highest tax bracket and investing a lot under your wifes name for you to benefit from a company structure. When your wifes investments themselves put her into the highest tax bracket obviously a company would be a better option. By the way when you reach this point well done this is what I aspire to.
Fab said:
This is not financial advice but there will come a point where investing under your wifes name will no longer be as viable as a flat tax rate of 30%. However that point is a long way off for most. I havn't got tax thresholds on hand but you would need to be well into the highest tax bracket and investing a lot under your wifes name for you to benefit from a company structure. When your wifes investments themselves put her into the highest tax bracket obviously a company would be a better option. By the way when you reach this point well done this is what I aspire to.
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Re: CFD's and tax
I'll be able to tell you next year....ATM I have no idea but also no job, and havent had a job or any other income, apart from buying selling shares and stuff, for the last 4 years....
I am happy to pay as much tax as I can....ie I would be earning more....lol
As it is I can write off all my toys as a part of my trade....I need all my toys to keep me sane enough to do this trading stuff, and so is therefore a part of my job....including bourbons.....hehe
EG if you were to pay $50 to goto an ASF party you would claim it as an expense....
Merry Xmas Guys and Gals
I'll be able to tell you next year....ATM I have no idea but also no job, and havent had a job or any other income, apart from buying selling shares and stuff, for the last 4 years....
I am happy to pay as much tax as I can....ie I would be earning more....lol
As it is I can write off all my toys as a part of my trade....I need all my toys to keep me sane enough to do this trading stuff, and so is therefore a part of my job....including bourbons.....hehe
EG if you were to pay $50 to goto an ASF party you would claim it as an expense....
Merry Xmas Guys and Gals
rub92me
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Re: CFD's and tax
Assuming the short term scenario (i.e. less than 12 months hold for all trades) and assuming no other income. Based on current personal tax rates and x = break-even.
0.30 * x = 17,850 + 0.4*(x-75,000)
Which would make : x = 121,150. So with a trading income more than this, the tax will start to exceed 30% of earnings. When you reach that point you can probably afford an accountant as well
:
Fab said:
Assuming the short term scenario (i.e. less than 12 months hold for all trades) and assuming no other income. Based on current personal tax rates and x = break-even.
0.30 * x = 17,850 + 0.4*(x-75,000)
Which would make : x = 121,150. So with a trading income more than this, the tax will start to exceed 30% of earnings. When you reach that point you can probably afford an accountant as well
:
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Re: CFD's and Tax
As far as I'm aware it always been the other way around - you pay tax on any income/profit unless the tax man says otherwise. I think in England they don't pay tax on CFD's, but in Aus we have always paid it for CFD's, so if you've been making money on cfd's but haven't been paying tax then be concerned.
As far as I'm aware it always been the other way around - you pay tax on any income/profit unless the tax man says otherwise. I think in England they don't pay tax on CFD's, but in Aus we have always paid it for CFD's, so if you've been making money on cfd's but haven't been paying tax then be concerned.
Hi,
I was wondering if someone could give me a quick idea before I go to my accountant on Monday.
What are the deductions allowed from CFD accounts?
1. Brokerage?
2. Interest?
3. Guarenteed Stop Loss brokerage?
4. Loss?
Seems like a murky one for the tax department?
Brad
I was wondering if someone could give me a quick idea before I go to my accountant on Monday.
What are the deductions allowed from CFD accounts?
1. Brokerage?
2. Interest?
3. Guarenteed Stop Loss brokerage?
4. Loss?
Seems like a murky one for the tax department?
Brad
CanOz
Home runs feel good, but base hits pay bills!
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Re: CFD's and Tax
I'm no expert here....or on anything else so DYOR but.....for the most part, CFD's and thier profits or losses fall quite clearly into two categories, income or a deduction...same goes for the brokerage etc...FROM WHAT I UNDERSTAND.
Cheers,
I'm no expert here....or on anything else so DYOR but.....for the most part, CFD's and thier profits or losses fall quite clearly into two categories, income or a deduction...same goes for the brokerage etc...FROM WHAT I UNDERSTAND.
Cheers,
Re: CFD's and Tax
Generally speaking then, if you start the year with a CFD balance of
$10,000 and the balance ends at
$11,500 - you have a $1,500 taxable income
OR
$8,500 - you can record $1,500 as a loss
And not have to explain the brokerage, interest, etc.
Cheers
Brad
PS. Thanks for the tax ruling.
Generally speaking then, if you start the year with a CFD balance of
$10,000 and the balance ends at
$11,500 - you have a $1,500 taxable income
OR
$8,500 - you can record $1,500 as a loss
And not have to explain the brokerage, interest, etc.
Cheers
Brad
PS. Thanks for the tax ruling.
Re: CFD's and Tax
15. A gain or loss from a financial contract for differences entered into for the purpose of recreation by gambling will not be assessable income under section 6-5 or section 15-15 of the ITAA 1997 or deductible under section 8-1 or section 25-40 of the ITAA 1997. A capital gain or capital loss from a financial contract for differences entered into for the purpose of recreation by gambling will be disregarded under paragraph 118-37(1)(c) of the ITAA 1997.
so if i determine my CFDs as a gamble, i don't have to report my gains or lossess then???
anyone care to shed some light?
15. A gain or loss from a financial contract for differences entered into for the purpose of recreation by gambling will not be assessable income under section 6-5 or section 15-15 of the ITAA 1997 or deductible under section 8-1 or section 25-40 of the ITAA 1997. A capital gain or capital loss from a financial contract for differences entered into for the purpose of recreation by gambling will be disregarded under paragraph 118-37(1)(c) of the ITAA 1997.
so if i determine my CFDs as a gamble, i don't have to report my gains or lossess then???
anyone care to shed some light?
