Private ruling: Share investing and share trading
Date of advice: 17 April 2019
Published: June 2019
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018
Date scheme commenced: 1 July 2016

Ruling: Q1: For the 2016-17 financial year were you considered a share investor? | A1: Yes | Q2: For the 2017-18 financial year were you carrying on a business of share trading? | A2: Yes. We have applied the relevant factors contained in Taxation Ruling TR 97/11 to your circumstances in making the above determination. Note, as you can operate both a share investment and trading portfolio simultaneously, any shares bought or sold for the purpose of investment must be accounted for under capital gains tax and excluded from your share trading activity in your income tax return for the 2017-18 financial year. Further information about shareholding as an investor or share trading as business can be found by searching 'QC 52205' on ato.gov.au

Relevant facts and circumstances: You are in full-time employment in an industry unrelated to financial investing or trading. You have an online brokerage account and trade in various publicly listed companies. You review the financial reports and performance of the companies, any company announcements and global news that may impact on the company, to determine when to buy or sell shares. You also seek financial advice from a friend who works in the financial industry. Your loss mitigation strategy consists of a stop loss percentage of approximately 25%. You use your savings for purpose of the activity. You trade from your laptop. You spend about 25 hours per week on the activity. You use a relevant program to record your trade data. You have purchased shares in a small number of the companies as long term investments. 2016-17 financial year You commenced purchasing shares in the 2016-17 financial year. For the 2016-17 financial year you made a number of purchases of shares but only made one sale. You considered yourself a share investor for the 2016-17 financial year. 2017-18 financial year For the 2017-18 financial year you made a large number of both purchases and sales of shares totalling a significant amount of money, with a large number of different companies. You made a loss from the activity during the financial year. You hold shares from between a number of days to a number of months, however you consider the average period as short term. You considered yourself a share trader for the 2017-18 financial year.

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 102-5 | Income Tax Assessment Act 1997 section 102-10