Hi all. I am new to this forum so apologies if this has been covered before.
I am also new to share trading, in fact I havent started yet, still reading and learning.
I am bit puzzled about the tax situation. Obviously we have to pay CGT on profit. Which is calculated at our normal tax rate, which for me would be twenty-something percent.
But the ATO would like share traders to be businesses. (see the example of Molly the engineer on the ATO website). But the ATO are a bit vague on exactly how frequent and how big trades have to be to make a trader a business. I would have thought my modest starting capital ($5000) would put me well and truly in the hobbyist catagory. But maybe the ATO think different?
If I become a business trader, do I have to get an ABN and go the whole hog? Or would I just be taxed as a business and get a few "tax right off" benefits? Which is better, CGT or income tax with benefits?
Also, if I was a business, what would the tax rate be? As I have a day job, would it be a second income and therefore taxed at 50%?
Excuse the dumb questions. I am still learning