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regcbap(Enthusiast)Enthusiast
21 May 2022

Dear ATO community,


In August 2020, I purchased some Cryptocurrency CFD’s (Contract for difference) for a total of $2000.


I held the CFD’s for more than 12 months and then sold them for a total price of $5000 in March 2022 (Capital Gains Tax event).


In doing so, I made a profit of $3000 (Capital gains).


When I lodge my tax returns for FY 21-22, will I be paying Capital Gains tax on the full $3000 Capital gains or only on half of it ($1500) as I held the CFD’s for more than 12 months?


Thank you in advance.

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1,435 views
4 replies

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BlakeATO(Community Support)Community Support
23 May 2022

Hi @recbap


You've got a good understanding of how CGT would work, but unfortunately, CGT doesn't apply to CFDs.


CFDs are on a revenue account (not capital account), meaning they're reported as other income and other deductions. The $3,000 is assessable income, and will be taxable in full. There's no CGT discount since it isn't a capital asset.


You can read about CFDs and how we view them in TR 2005/15.

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Most helpful reply

BlakeATO(Community Support)Community Support
23 May 2022

Hi @recbap


You've got a good understanding of how CGT would work, but unfortunately, CGT doesn't apply to CFDs.


CFDs are on a revenue account (not capital account), meaning they're reported as other income and other deductions. The $3,000 is assessable income, and will be taxable in full. There's no CGT discount since it isn't a capital asset.


You can read about CFDs and how we view them in TR 2005/15.

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regcbap(Enthusiast)Enthusiast
24 May 2022

Hi @BlakeATO thanks heaps for clarifying this question :-)


So, when I report this $3000 in my tax returns, I won't be able to offset it using some Capital loss I have been carrying over from previous years?


Thanks


Have a great week ahead!

BlakeATO(Community Support)Community Support
25 May 2022

Hi @regcbap


Yes, that's right. Capital losses can only be offset against capital gains, and since CFDs are normal income, not capital gains, you wouldn't be able to offset capital losses against them.


If you invest in crypto directly, you could use capital losses against those, but not CFDs on crypto.


If you want to read more about how we view CFDs, we've got a great thread with pretty deep discussion on CFD taxation on gains and losses.

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