Private ruling: Deductions - futures
Date of advice: 12 May 2026
Published: 17 August 2026
Ruling period: Year ended 30 June 20YY | Year ended 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are the losses from trading futures an allowable deduction under section 25-40 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Taxation Ruling TR 2005/15 Income tax: tax consequences of financial contracts for difference (TR 2005/15) discusses the taxation treatment of trading futures. TR 2005/15 states where this type of trading is part of the carrying on of a business, the gains and losses from the transactions will be accounted for under sections 6-5 and 8-1 of the ITAA 1997. Otherwise, TR 2005/15 states the trading activities will be regarded as part of the carrying out of a profit-making undertaking and a net gain or a net loss from trading will be accounted for under either section 15-15 or 25-40 of the ITAA 1997. Either way, the gains and losses resulting from a futures transaction will be of an income nature. Having considered your facts and circumstances we do not consider that your activities amount to the carrying on of a business. Accordingly. as your futures trading was undertaken with a view to making a profit, your losses are deductible under section 25-40 of the ITAA 1997.

Relevant facts and circumstances: You undertook a securities-trading training course and subsequently subscribed to software used for trading shares, currencies and other securities. You transferred your money into xx and used it to fund payments for broking accounts You were allocated a trader who assisted and encouraged you in the early stages of trading. You made less than 100 trades on futures over approximately a one-year period. You made a significant profit on early trades but after this and one or two other small wins, you continually chased losses and lost your entire investment and had no trades open.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 15-5 | Income Tax Assessment Act 1997 section 25-40