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Taxation of CFD Overnight Funding

Newbie

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If a CFD position is held over two financial years (IE a longer term hold perhaps) are the overnight funding costs deductable in the first financial year.

 

Example: A long position has daily costs of approx $10 per day held from June 21 to July 5th.  Is the $100 (10 days x $10) an allowable loss in the June finacial year, or is only the P/L counted in the July FY once the position is closed?

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Most helpful response

ATO Community Support

Replies 0

Hi @BigJilm

 

It'll depend on if you're an investor or trader

 

If you're an investor, it will form part of your cost base, offsetting any later capital gain from disposal/sale. 

 

If you're a trader, it will depend on if you account on a cash method or an accruals basis:

  • If you report on a cash method, it will be deductible when you pay the fee (or are charged the fee if it's automated)
  • If you report on an accruals method, it will be deductible when you are invoiced for the fee.
1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @BigJilm

 

It'll depend on if you're an investor or trader

 

If you're an investor, it will form part of your cost base, offsetting any later capital gain from disposal/sale. 

 

If you're a trader, it will depend on if you account on a cash method or an accruals basis:

  • If you report on a cash method, it will be deductible when you pay the fee (or are charged the fee if it's automated)
  • If you report on an accruals method, it will be deductible when you are invoiced for the fee.