CFD Profit, Investing and Taxation

• 

  SBOB on 18/05/2021 - 07:00

  +5

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

• 

  Elppa8 on 18/05/2021 - 07:42

  +1

  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.

  • 

    thisarapc on 18/05/2021 - 07:46

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

    • 

      cloudy on 18/05/2021 - 09:58

      +1

      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.

      • 

        Travis J on 18/05/2021 - 10:21

        +2

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

        • 

          cloudy on 18/05/2021 - 14:01

          @Travis J: It’s really easy

• 

  mskeggs on 18/05/2021 - 08:11

  +1

  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/

  • 

    holdenmg on 18/05/2021 - 11:04

    Cattle Breeding…

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

• 

  hentabara on 18/05/2021 - 08:14

  +1

  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.

  • 

    thisarapc on 18/05/2021 - 08:20

    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.

    • 

      brendanm on 18/05/2021 - 10:18

      +1

      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.

• 

  ozbargainsam on 18/05/2021 - 08:30

  +1

  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.

• 

  hoey888 on 18/05/2021 - 10:18

  +1

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

• 

  Chandler on 18/05/2021 - 10:30

  +1

  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

  • 

    thisarapc on 18/05/2021 - 10:44

    Thank you so much for the effort you put in.

    • 

      Chandler on 18/05/2021 - 10:50

      +1

      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.

• 

  orangetrain on 18/05/2021 - 11:38

  +1

  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.

• 

  NatashaLansell on 10/07/2021 - 00:37

  Wow! Amazing! Is it really possible to make money trading CFDs? Here https://www.ozbargain.com.au/node/454263 they say that basically everyone loses their money, and moreover I have heard that they have long wanted to make restrictions on CFD trading in Australia. Where and for how long did you learn to trade CFDs?

  • 

    thisarapc on 12/07/2021 - 09:48

    There are lots of platforms you can do CFD on Aus. (etoro,plus500 etc)
    I was doing it for about 6 months to make about 30K.
    My rule is not to be greedy and close the contract once you make your money from each contract and always have enough backup money if the market goes down.

• 

  ozbargainerlife1 on 24/07/2021 - 08:56

  Did you show this as assessable income or did you argue as business

• 

  thisarapc on 24/07/2021 - 15:41

  I will have to declare that as a business income as it is not a long term investment or something similar.
  My accountant advised me that I will be able to deduct the related expenses…