ATO Community

CFD taxation on gains and losses

Former Community Support

Replies 6

Hi @HariOm and @CHon,

 

Thanks for your question.  As you can appreciate, CFD’s are a complex topic! 

 

To prevent further confusion about your individual circumstances please contact our Early engagement area to discuss and explore the tax issue you are seeking advice on. For ease of contact, there is also a callback request form available on our website.

 

Another option is to request a private ruling; this is binding advice that sets out how a tax law applies to you in relation to specific circumstances.

 

I hope this helps, JodieM

Initiate

Replies 5

Thanks @JodieM,

I have requested call back to discussed.

Appreciate your advice.

Rehards,

HariOm

Newbie

Replies 4

Hi @HariOm,

Do you mind to share the discussion with ATO? 

I would also like to know in order to finalise my tax return.

Thank you.

Initiate

Replies 3

Sure @CHon. I did got callback from ATO and person was very helpful. He clarified things for me and in short my understanding was correct. I am submitting my tax today. I would suggest you to do request for call service and discuss your situation personally.

 

@JodieM Thanks for your advice.

 

Regards,

HariOm

Newbie

Replies 2

Just wondering how you went with your claim for the losses on your trades on the return you lodged? Did they approve the losses to be set off against your income? Which part of the online individual tax return is the section? Did they clarify the maximum limit of trade transactions before a profit undertaking is deemed business activity even if you do not have an ABN? Sorry for the many questions but I have recently started trading CFDs to supplement my salary and take advantage of the historically low oil prices. Thanks

Newbie

Replies 1

Newbie

Replies 0

I'm new

Replies 0

As a follow up to this thread in respect of the tax treatment of CFD's (which is very helpful), I have a query surrounding the non-commercial losses requirements, in particular the Assessable Income test. 

 

The Assessable Income Test provides the following (per https://www.ato.gov.au/business/non-commercial-losses/four-tests/#Assessableincometest):

 

To pass the assessable income test, assessable income from your business activity during the financial year must be at least $20,000.

Assessable income includes:

  • ordinary income – for example, the gross earnings (excluding GST) of a business activity, and
  • statutory income – for example, capital gains.

If you pass the assessable income test, you can claim your losses in the current year.

 

As it relates to the trading of CFD's, can you please provide some insight into how ordinary income is defined given that you not actually selling a share (but rather a derivative of that as that is what a CFD is) hence would'nt be holding trading stock as such.

 

Is it the sum of all profitable CFD trades only (hence exploring this qualification criteria) or is it the net of profitable and unprofitable trades? Any help on this would be greatly appreciated.

Newbie

Replies 2

 

 

If it is assessed as a profit-making activity, where in MyTax is it reported at?? 

 

Appreciate if you please share your experience, is it at OTHER DEDUCTIONS OR OTHER INCOME OR OTHER FOREIGN INCOME @HariOm @CHon @VinceB @Bobby_Axelrod @blakemalcolm 

Newbie

Replies 1

Hi @Skyblues did you find out where this to be added in tax online?