Private ruling: Share trader or investor
Date of advice: 9 November 2022
Published: 16 January 2023
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Were you carrying on a business of share trading in the income year ended 30 June 20XX? | A1: No, while there are some business-like characteristics of your share activity, it is considered that it does not amount to a business of share trading in how it has been conducted to date. The buying and selling of shares has been relatively limited and intermittent and has only involved a fairly minimal amount of capital. You have no training or background in such financial matters and do not have a sophisticated trading strategy. As your share activity did not amount to a trading business, it is considered your shares are held for investment purposes and so gains and losses made from the sale of those shares are subject to the CGT provisions. The question of whether a business is being carried on is a question of fact and degree and is determined on a year by year basis. If your activities do not amount to the carrying on of a business in one income year, that will not prevent them doing so in a later income year should the level of activity increase or become more sophisticated or structured. Further information on share trading and share investing can be found at the ATO website, search for 'QC 66047'.

Relevant facts and circumstances: You bought and sold shares intermittently over an X month period. You injected under $XX of your own money into the activity. You made small gains by buying low and selling higher. You have no knowledge or experience in such financial matters. Some months you traded infrequently, some months you traded daily. Shares were held for varying periods (days to months). You did not have an intention to trade shares.

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 995-1 | Income Tax Assessment Act 1997 Section 100-25