CFD Profit, Investing and Taxation

Hello guys,

I need some advice from the tax experts over here.
I have made some money doing CFD trading (30k) over the financial year and I have my day job as well (80k).
If I combined my total income , I will have to pay tax for all 110k.
I would like to know if there is a way to spend my CFD earned money on Gold or a land or any sort of investment that will bring my total income closer to 80k, so I can make my CFD earned money to make more money.

Thank you so much for your inputs. And apologies if I did not use much if the technical words. Hope to hear from you guys. Have a nice day.

( I am trading under my name and I have an abn under my name as well)

Comments

  • +5 votes

    Nope.
    Congrats on the capital gains, and we thank you for your 32.5% tax contribution on those gains.

  • +1 vote

    I think there is by making contributions to Superannuation and claiming a deduction. There are limits per year but there are bring forward rules allowing you to exceed those limits. Of course this ties your money up until retirement.

    Have a talk to your Superannuation fund or a tax accountant.

    •  

      It looks like the super is the only way sofa.
      Still investigating the other options. Thanks for the response.

      • +1 vote

        Donations to charity is also deductible. So donate as much as you want to a registered charity will your income down.

        Or lose a lot of money in investing works as well.

        • +2 votes

          How do you start your own charity? Asking for a friend.

  • +1 vote

    There is long history of shonky agricultural investments that offer tax deductions up front.
    Typically, they invest in growing timber, or planting olive trees - something which takes a decade or more for a return. Many went broke.
    https://www.stptax.com/tax-tips/agribusiness-schemes/

    •  

      Cattle Breeding…

      When Bart said "Don't have a cow, man." he were right. :+)

  • +1 vote

    Not much. Once you got the profit, you must pay CGT for it. Regardless whether you withdraw the Money or not.
    You can do donation / super contribution / buying something for WFH equipment.

    •  

      Yeah I know. But my intention is investing that money in to something without consuming.
      I am more than happy to pay all the tax if I am consuming that money. Thanks for the input.

      • +1 vote

        It doesn't matter what you do with it. Once you withdraw the money from whatever you have it invested in, if you have made a gain on it, you pay tax on it, whether you are "happy" about it or not.

  • +1 vote

    Any non-arms-length transaction is a CGT event attributable to you or your business. If it's a profit or loss. Like when I was trading crypto, every tiny little trade, including all individual purchases made in a single order at dozens of prices, they are individually taxable events.

    If you want to be audit-proof, you declare everything as income.

    All other schemes are just tax deductions separate to your gains.

  • +1 vote

    You could also sell another asset at capital loss to offset capital gain. This only really transfers the problem to another person/entity/structure.

  • +1 vote

    It sounds like you're concerned that by earning the extra income from trading you will lose more of your income from working to tax. That's not how our tax system works.

    You pay on the margins. https://www.ato.gov.au/Rates/Individual-income-tax-rates/

    Lower - Upper Tax Rate
    up to $18,200 0%
    $18,201 - $45,000 19%
    $45,201 - $120,000 32.5%
    $120,001 - $180,000 37%
    $180,001 and over 45%

    So on your $80k income you pay ~$16.5k tax - $0 (0% on the first $18.2k) + $5092 (19% on the $26.8k that is in the 45k total bracket) + $11.375k (32.5% on the 35k in the 120k total bracket)

    Lower - Upper Tax Rate Income Tax Paid
    up to $18,200 0% $18,200 0
    $18,201 - $45,000 19% $26,800 $5,092
    $45,201 - $120,000 32.5% $35,000 $11,375
    $120,001 - $180,000 37% $0 $0
    $180,001 and over 45% $0 $0
    Total $80,000 $16,467

    If you add $30k from investing to that, you pay 32.5% tax ($9.75k) on the extra $30k as you are (still) in the 120k bracket (as your total income would be $110k).

    Lower - Upper Tax Rate Income Tax Paid
    up to $18,200 0% $18,200 0
    $18,201 - $45,000 19% $26,800 $5,092
    $45,201 - $120,000 32.5% $65,000 $21,125
    $120,001 - $180,000 37% $0 $0
    $180,001 and over 45% $0 $0
    Total $110,000 $26,217

    Note: am not tax agent or financial adviser. This is not financial advise :P

    •  

      Thank you so much for the effort you put in.

      • +1 vote

        All good. Just simple excel formulas (not that I work in the financial sector). Doing the markdown formatting twas the hardest part!

        Mind you the above doesn't take into account the Medicare Levy Surcharge (MLS), CGT discounts, other tax implications from investing, etc. It is just basic income tax.

  • +1 vote

    Go back in time. Set up a company in Cayman Islands like most rich people do. Trade from that company. Only pay fees/taxes for company in Cayman Islands.