There is a case, one person has CFD loss 100k in current financial year, trading as an individual not the business. However, he sold a property and earned 100k capital gain ( after 50% CGT discount). In the tax return, does the CFD loss will offset the capital gain in full? I am a bit of confusing. I know if opposite, capital loss will be carried forward, and $100k CFD profit will be revenue. Anyone has some tips?
Hi @Rachelwei,
Contracts for differences (CFD) will generally be assessable income where the transaction is entered into as an ordinary incident of carrying on a business and as such will form part of business income rather than capital income so losses will not be available to offset capital gains. There are some circumstances where CFD losses will be capital losses and you will need to make a determination or seek the assistance of a tax professional to help you make the determination. You can find more at these web pages: Share investing vs share trading, Using capital losses to reduce capital gains, CGT events.
You might also want to review the ATO view on CFDs in TR 2005/15 Income tax: tax consequences of financial contracts for differences which outlines that CFDs are usually on revenue account, not capital. Where the CFD losses are capital losses they can offset other capital gains.
Hi there @Rachelwei,
We'll check this out with our experts and we'll keep you posted.
Hi @Rachelwei,
Contracts for differences (CFD) will generally be assessable income where the transaction is entered into as an ordinary incident of carrying on a business and as such will form part of business income rather than capital income so losses will not be available to offset capital gains. There are some circumstances where CFD losses will be capital losses and you will need to make a determination or seek the assistance of a tax professional to help you make the determination. You can find more at these web pages: Share investing vs share trading, Using capital losses to reduce capital gains, CGT events.
You might also want to review the ATO view on CFDs in TR 2005/15 Income tax: tax consequences of financial contracts for differences which outlines that CFDs are usually on revenue account, not capital. Where the CFD losses are capital losses they can offset other capital gains.
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