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UK Spread Betting Account

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I would like to know if UK Spreadbetting accounts are taxable as foreign income/losses for Australian Tax Residents.

 

Some information on spread betting:

- Providers such as IG Index (https://www.ig.com/uk/welcome-page) allow you to spreadbet financial markets (indicies, foreign exchange, shares, crypto currencies etc.)

- In the UK, the gains and losses are disregarded for tax purposes as they are deemed to be income/losses from betting activity which is exempt

- Nearly all trades are open and closed within a days, weeks, or months. A trade would typically never be greater than 12 months.

 

In Australia, similar activity may not be considered as betting and might be taxable?

- If taxable in Australia, would gains / losses be treated as Income or Capital Gains?

- If exempt in Australia, under what rule is it exempt?

 

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ATO Certified Response

Former Community Support

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Hi @vipso,

 

Thanks for your patience whilst we received specialist information in relation to your query!

 

Generally it would depend on your own particular circumstances as to whether you could be said to be merely gambling or undertaking recreational activity or undertaking taxable activities. If you're carrying on a business of these activities then gains are declared as ordinary income and losses can be deducted against other income.  If you are found to be undertaking commercial business like transactions then similar outcomes apply. Otherwise, your outcomes are treated on capital account and any losses cannot be offset against assessable income. If the amounts are capital, section 118-37 of the ITAA 1997 provides that gambling is not taxable for CGT purposes.

 

If you would like a more tailored response about the taxation of your spread betting activities, you can write to us to request a private binding ruling. Private rulings are binding advice from us that explains our view on how tax law applies to a specific situation. They are free services and we aim to response within 28 days from receiving your request.

 

Thanks, JodieH.

1 REPLY 1

Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @vipso,

 

Thanks for your patience whilst we received specialist information in relation to your query!

 

Generally it would depend on your own particular circumstances as to whether you could be said to be merely gambling or undertaking recreational activity or undertaking taxable activities. If you're carrying on a business of these activities then gains are declared as ordinary income and losses can be deducted against other income.  If you are found to be undertaking commercial business like transactions then similar outcomes apply. Otherwise, your outcomes are treated on capital account and any losses cannot be offset against assessable income. If the amounts are capital, section 118-37 of the ITAA 1997 provides that gambling is not taxable for CGT purposes.

 

If you would like a more tailored response about the taxation of your spread betting activities, you can write to us to request a private binding ruling. Private rulings are binding advice from us that explains our view on how tax law applies to a specific situation. They are free services and we aim to response within 28 days from receiving your request.

 

Thanks, JodieH.