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http://law.ato.gov.au/atolaw/vie ... 00515/NAT/ATO/00001
Taxation ruling TR2005/15 provides guidance on the tax treatment of contracts for differences. Broadly, a gain from a financial contract for differences will be assessable income under section 6-5 of ITAA 1997 where the transaction is entered into as an ordinary incident of carrying on a business, or where the profit was obtained in a business operation or commercial transaction for the purpose of profit making. Accordingly, losses incurred in a CFD will be deductible under s8-1.
A gain from a CFD will be assessable income under section 15-15 of the ITAA 1997 where a taxpayer enters into a financial contract for differences in carrying on or carrying out a profit-making undertaking or scheme, and the gain from it is not assessable under section 6-5 of the ITAA 1997. And accordingly, losses incurred will be deductible under s25-40.
Expenses such as commission and interest incurred in deriving income from a CFD would be deductible. Interest earned on the short contracts will also be assessable income.
For more information, please refer to TR2005/15. |
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