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Do I need an ABN to be classified as day trader?

Newbie

Views 3768

Replies 6

Hi all,

 

So I've been doing a lot of day trading US Options and some ASX shares almost every day especially this start of the new FY20-21. I do it to gain profit in the short term. I've read about the day trade and shareholder article on ATO, but it is still unclear to me.

 

Do I need to have an ABN, come tax time if i want to claim all the expenses/losses I have doing day trades? I dont have a business plan, but I do from time to time read articles, social media, join trading groups to gain knowledge on stocks to trade. Is this enough to be classifed as day trader? I've boutght online courses about trading  as well.

 

Thanks for your help.


Cheers,

Ron

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Former Community Support

Replies 3

Hi @mcargy08

 

Generally speaking, if you've identified yourself as a share trader, you're considered to be carrying out business activities for the purpose of earning income so you need to register for an ABN. From what you have stated you are a share trading as a business as you are carrying out actions for the purpose of earning income from buying and selling shares.

 

Hope this clears it up!

6 REPLIES 6

Former Community Support

Replies 5

Hi @mcargy08

 

Generally speaking, whether you need an ABN will depend on the nature of your activities and whether you're considered to be holding shares as an investor or carrying on a business as a share trader, regardless if the broker needs to see an ABN or not.

 

On our site we have information which will help you determine if you are shareholding as investor or share trading as a business.  You can use the entitled to ABN tool to determine if you are entitled to an ABN.

 

Hope this helps!

Newbie

Replies 4

Thanks for the reply! That's the thing, though, my activities are considered as a share trader, however I don't have ABN and I'm not carrying a business. I just do this as an extra way to earn an income. I've read that link so many times, I'm still confused, hence I asked here.

I'm not share holding, as I do day trades. So is than mean I'm carrying a business to do share trading? Do I need an ABN? Or can I still carry a "business" to do day trades without ABN?

Most helpful response

Former Community Support

Replies 3

Hi @mcargy08

 

Generally speaking, if you've identified yourself as a share trader, you're considered to be carrying out business activities for the purpose of earning income so you need to register for an ABN. From what you have stated you are a share trading as a business as you are carrying out actions for the purpose of earning income from buying and selling shares.

 

Hope this clears it up!

Newbie

Replies 2

Awesome, thanks!

Newbie

Replies 1

Thanks. I am in same situation. I have been doing day trading since last one year but do not have ABN yet. I am definitely a trader and not investor. How can I go back and register sole trader ABN now at the tax time. Please advise if I can register an ABN now and back date the active date to last year? 

ATO Community Support

Replies 0

Hi @ghodiyu,

 

We have answered your other post on our forum, you can view our response here.

 

All the best.