Private ruling: Business deductions
Date of advice: 22 February 2021
Published: April 2021
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the gains or losses made from your CFD trading assessed under sections 15-15 and 25-40 of the ITAA 1997 and treated as profits or losses made from an undertaking or scheme? | A1: Yes

Relevant facts and circumstances: You have been trading contracts for differences (CFDs) during the financial year ended 30 June 20XX. You undertook your CFD trading activities alongside your regular full-time employment. You invested an amount of money each month since you started trading which resulted in a loss of $X. The underlying motive of your trading was to make a profit. During the financial year you completed more than X number of transactions. You do not have a formal business plan. You have bought a new laptop, paid for a 24/7 server to run the trading platform and bought several software amounting to $X to analyse the market. You have established a dedicated space in your home to do market monitoring and research. You educate yourself and utilised resources by: • using an online video platform, • subscribing to learning material for which monthly fees are payable, • paying for trading experts to obtain market insights and technical data, • attending webinars, • following the market through broker and trade news channels, and • trying to automate a few trading strategies. You use Excel sheets for record keeping. You made a loss of $X from CFD trading. You have since stopped trading.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 15-15 | Income Tax Assessment Act 1997 section 25-40 | Income Tax Assessment Act 1997 section 118-20 | Income Tax Assessment Act 1997 section 995-1