Private ruling: Am I carrying on a business?
Date of advice: 13 November 2018
Published: January 2019
Ruling period: Financial year ending 30 June 20XX | Financial year ending 30 June 20XX
Date scheme commenced: 1 June 20XX

Ruling: Q1: Are you carrying on a business of trading in contracts for differences (CFDs)? | A1: Yes. You meet the relevant factors contained in Taxation Ruling TR 2005/15, which indicate that you carry out the CFD transactions as an ordinary incident of carrying on a business. Further information about carrying on a business can be found by searching 'QC 31733' on ato.gov.au

Relevant facts and circumstances: In previous financial years you carried on a business of CFD trading. You ceased regular trading when you recognised that your trading strategies were not as profitable as hoped. You began your CFD trading activity again in the 20XX-XX financial year with a new strategy that involves software you developed using historical data. You review the trades on a regular basis. You will adjust the software based on your reviews. You made a large number of trades in in the 20XX- XX financial year. At the start of the 20XX - XX financial year you scaled back the level of trades and anticipate the activity will make an average of XXX trades per month. If the strategy appears profitable, you will raise the average contract value incrementally over time. You have invested a significant amount of time creating and implementing the trading strategy, and as such have an expectation of profit. You have read many books on trading and risk management, looked for online materials and attended trading seminars. You have a home office from where you conduct the activity from a laptop. Your intent is to carry out a CFD trading business. You are not a social gambler.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 8-1