Spread betting and Fx trading Australia.

Fellow traders in Oz,

I am trading fx (demo) but also heard about spread betting which is tax-free in the U.K.

Is it the same here in Australia?What tax regulations are for fx and spread betting.

What betting firms can I use here in OZ?

Thanks for info.

Kennard,

the ATO is "going to release information about the taxation implications of spread betting soon" - or so they said in 2002! Still waiting.

If you want the definitive ruling you need to apply to their 'aggresive taxation planning' department where they are very nice when they answer your questions. If you are losing then no deductions but if you happen to win the answer may change!! Seriously though, it is determined on a case by case basis.

You can trade with IG index in Aust for spreads. Rest are offshore providers except for CMC who only do CFD's in Aust I think.

Best of luck.

AT

Thanks Aussie trader,

Yes, i was browsing their(ato) website but it wasn't clearly stated whether its taxed or not.

Checked IG's spread but not really tight one .

I also have demo with Deal4free ,they have better spreads, but i am not sure if it will be tax-free for me as well .Will write them anyway.

Kennard said:

Thanks Aussie trader,

Yes, i was browsing their(ato) website but it wasn't clearly stated whether its taxed or not.

Checked IG's spread but not really tight one .

I also have demo with Deal4free ,they have better spreads, but i am not sure if it will be tax-free for me as well .Will write them anyway.

Click to expand...

Hi Kennard,

I think you'll find tht you get the sun - we get the tax breaks!

The UK tax free status of spread betting is a unique (anomaly) of our tax system.
A few years ago, the whole betting industry started moving offshore and the revenue had to try and stop it. They therefore decided to tax the betting company profits rather than individual bets.
Financial betting is a lucky beneficiary of this chnage that the treasury was forced to make.


If you have a family member living in the UK, you could get them to open an account for you to trade. They would get the profit tax free and they could send it to you. (obviously an element of trust involved here, that's why I said FAMILY member)

shouldn't you declare that transfer of money as being a gift - i.e. subject to tax ?

I heard a story that one punter had an unfavourable ruling from the ATO and then appealed through the courts and actually won. Might be urban myth!

Would love to see the case law but unable to locate it. Any aussie lawyers amongst us with search facilities?

I tell my Australian based course purchasers that they need to get professional tax advice but never know if they do or not.

The tax benefits of SB are great but I still think they offer a great opportunity for the 'man in the street' irrespective of the taxation implications.

AT

SB's great for smallish profits with position trading, otherwise i don't think it's worth using SB's. if you start to make big money, you'll probably get a demand from the IR. also depends on whether you rely on those winnings for income or whether you can afford to leave the fund to grow - if you can do that, then it may be a better idea to trade CFD's through your pension instead.

In Aust, you can't trade CFDs or SB through a pension fund as they are leveraged instruments. I am a position trader so SB offers great leverage and have never had a serious problem with the spreads or pricing changes.
Smallish profits - I have to disagree. Profits are only determined by bet size and market moves and there are plenty of opportunities to make big profits. In my experience anyway
AT