The tax man

[BlindSquirrel]

This thread will do, I guess:
While I'm still learning to play nice with CFDs, I've managed to lose a bit of money this last financial year. Am I able to carry these forward in preparation for the time in future when I might "get it" and start making money with them? I'm sure that if I trade well then these gains will be classed as income and the taxman will want a cut...

 

[Value Collector]

This thread will do, I guess:
While I'm still learning to play nice with CFDs, I've managed to lose a bit of money this last financial year. Am I able to carry these forward in preparation for the time in future when I might "get it" and start making money with them? I'm sure that if I trade well then these gains will be classed as income and the taxman will want a cut...

Any losses should be able to be written off against profits in that year.

Capital losses can be carried forward.

But probably speak to accountant.

 

[rnr]

@BlindSquirrel
If you Google the statement below you will get access to a considerable amount of info for you to consider.

CFD taxation on gains and losses - ATO Community

 

[barney]

@BlindSquirrel
CFD taxation on gains and losses - ATO Community

It depends on how the ATO perceives your trading exploits. ie. Trading as an Investment or trading as a business. Link below:-

https://www.ato.gov.au/General/Capi...ng-as-investor-or-share-trading-as-business-/

 

[BlindSquirrel]

From what I can surmise, it is assessable on revenue account and any net losses are non-commercial losses.
So I'm correct in that if I win, I get taxed; if I don't then I don't get to offset it against my income and can't carry if forward for future. I'd best git gud soon then!

Thanks to all for your help.

 

[rnr]

It depends on how the ATO perceives your trading exploits. ie. Trading as an Investment or trading as a business. Link below:-

https://www.ato.gov.au/General/Capi...ng-as-investor-or-share-trading-as-business-/

@barney
As per your link, the guidelines as laid out, albeit in a broad-brush format, are sufficient to determine whether you are a trading or investing. Your actions will need to back up your choice.

 

[rnr]

From what I can surmise, it is assessable on revenue account and any net losses are non-commercial losses.
So I'm correct in that if I win, I get taxed; if I don't then I don't get to offset it against my income and can't carry if forward for future. I'd best git gud soon then!

Thanks to all for your help.

@BlindSquirrel
I don't understand how you have arrived at that conclusion.

 

[BlindSquirrel]

I should clarify: I don't get to offset the losses against my regular salary. I can offset those losses against profits from trading CFDs but the excess losses are not able to be carried forward or offset against regular income.

ATO on non-commercial losses: "You can't claim a loss for a business that is little more than a hobby or lifestyle choice. Even if it has business-like characteristics, if it is unlikely to ever make a profit and doesn't have a significant commercial purpose or character, you can't offset the loss against your other income."

 

[barney]

Your actions will need to back up your choice.

[COLOR=#000000]Yeah you are kind of judged relative to how you trade, so the ATO/Tax man/ accountant you use may determine how your trading (tax wise) is structured …[/COLOR]

[COLOR=#000000]Given it's a bit of a grey area taxation wise, best each person gets suitable personal advice relative to their own circumstances …… my circumstances are likely different to most …. but in saying that, the previous ATO link is a good guide to start with and discuss with your accountant.:)[/COLOR]
ps Sorry about the "bold" and apparently "green"… It happens from time to time and I have no idea how to fix it lol

 

[rnr]

[COLOR=#000000]Yeah you are kind of judged relative to how you trade, so the ATO/Tax man/ accountant you use may determine how your trading (tax wise) is structured …[/COLOR]

[COLOR=#000000]Given it's a bit of a grey area taxation wise, best each person gets suitable personal advice relative to their own circumstances …… my circumstances are likely different to most …. but in saying that, the previous ATO link is a good guide to start with and discuss with your accountant.:)[/COLOR]
ps Sorry about the "bold" and apparently "green"… It happens from time to time and I have no idea how to fix it lol

@barney

Yes Barney I totally agree with your comment in relation to getting independent advice, however there is a large amount of info on the ATO site that will allow you to be prepared for that interview with a tax accountant.

And here's me thinking you were just making a bold statement to my reply!

 

[barney]

@barney

Yes Barney I totally agree with your comment in relation to getting independent advice

And here's me thinking you were just making a bold statement to my reply!

Bold!! …….. mmmm …… not my style lol …….

 

[HelloU]

This thread will do, I guess:
While I'm still learning to play nice with CFDs, I've managed to lose a bit of money this last financial year. Am I able to carry these forward in preparation for the time in future when I might "get it" and start making money with them? I'm sure that if I trade well then these gains will be classed as income and the taxman will want a cut...

https://www.ato.gov.au/law/view/document?docid=TXR/TR200515/NAT/ATO/00001